4-Point Insurance Inspection
Four point inspections are the tools that insurance underwriters and insurance companies use to determine risk. As you might have guessed, there are four main things that are being examined during a four-point inspection: 1) Electrical, 2) Plumbing, 3) Roof and Structure, and 4) HVAC system
Four Point Inspections focus on four main areas of a home:
Plumbing connections and fixtures
Electrical wiring and panels
HVAC (Heating, Ventilation and Air Conditioning)
The inspection describes the condition and age of these elements.
Insurance companies have become increasingly reluctant to issue Homeowner Insurance Policies on older homes (usually 25 years old or more).
Their concern is that there may be conditions in an older home that could become a liability to them. For instance; a home with a roof nearing the end of its reliable service life may fail while under the policy and the homeowner may seek reimbursement from their insurance company for damages to the home or its contents. Similar concerns extend to the condition of the HVAC, electrical and plumbing systems in an older home. If these elements are in poor condition, in need of being updated or replaced or were improperly installed, they may fail and cause fire or water damage to a home.
Newer homes are assumed (by the insurance companies) to not have these problems as frequently as older homes.
During a four-point inspection, an inspector will look at...
Electrical Wiring and Panels: What kind of wiring is in your home? If a home has aluminum, or knob-and-tube wires, chances are it will not be insurable due to fire hazard risks. Faulty wires cause nearly 90 percent of residential fires, so this is something insurance companies take very seriously. If your home is found uninsurable due to wiring issues, it is vital to budget for necessary upgrades. If you don't, your risk of fire is significantly amplified.
HVAC (Heating, Ventilation, and Air Conditioning): Does your home have central heating and air conditioning? What condition are the units in? Are there any signs of obvious damage such as leakage? Remember each insurance agency determines what it considers "acceptable" when insuring older homes; however, it’s not uncommon to see coverage denied for lack of central air and heat.
Plumbing: Inspectors look at the type of pipes in your home to determine how likely they are to burst. If polybutylene plumbing is found coverage can be denied as these are more prone to bursting. However, some insurance companies may still insure you but will exclude water damage. In that scenario, if there is a flood due to pipes bursting, you are 100 percent responsible for the total expense.
Roof: Roof age, material, and condition are what inspectors look for. Generally, insurance companies do not insure shingle roofs more than 20 years old or tile or metal roofs more than 40 years old. However, if your roof is younger but has apparent damage outside or water leaks inside your home, that might cause a denial of coverage.