A 4-point inspection is an examination of the current condition of a house or condominium. In this inspection, four crucial systems are reviewed:
Homeowners insurance companies request this inspection before someone can renew or be eligible for their desired home insurance plan.
It's important to be aware of the possibility that you’ll need to obtain a four-point home insurance inspection before you can obtain an insurance policy.
Here’s what you need to know about 4-point inspections so you can have an easier time obtaining home insurance.
What Are 4-Point Home Insurance Inspections For, and When Are They Required?
Four-point home insurance inspections were introduced after Hurricane Andrew in 1992. This Category 5 hurricane devastated south Florida. The storm destroyed over 25,000 homes and damaged over 101,000 more, leaving hundreds of thousands of people homeless.
As devastating as the hurricane was, its impact on insurance was perhaps even longer lasting. The storm caused over $27.3 billion in insured losses, which resulted in 16 insurer failures.
In response to this, home insurance companies began mandating four-point home insurance inspections on older properties. These inspections focus on the four household systems that are the most costly for an insurer to replace: roofing, HVAC, plumbing and electrical.
The main idea behind the inspections is that older homes are not built to the same construction standards as newer properties. This is especially true of coastal states like Florida, where building codes are updated more frequently to ensure that properties are better equipped to withstand hurricanes.
As a result, most insurers require four-point home insurance inspections when someone is going to buy insurance for a property they own that is 40 years old or older, or when renting a property that is over 30 years old. This can be true both when you are buying a “new to you” home, or when the property you are living in reaches this milestone.
It’s also worth noting that the exact timeline for when an insurance company might require a four-point home insurance inspection can vary from company to company. Some insurers may even require that you obtain this inspection after living in a house for five years just to be sure that the property is being maintained properly.
What Each Inspection Covers
Similar to a standard home inspection, the four-point home insurance inspection focuses on what the inspector can see with the naked eye when they look at these parts of the home. This allows them to quickly identify any noteworthy maintenance issues without necessarily needing to perform a full system test.
The following are key issues that an inspector will report on for each of the four areas:
Changes to Florida roofing insurance requirements mean that insurers can’t refuse to issue a policy if the roof has at least five years of remaining life, or if it is less than 15 years old. The law has also implemented changes to when a roof can be repaired, as opposed to needing to be completely replaced.
That being said, roofs that don’t comply with 2007 building codes are more likely to be refused coverage, unless the homeowner gets the roofing system up to current standards.
During the four-point inspection, the inspector will make note of the type of roof on the home, as well as its age and an estimate of how many years of life it has left. They will also make note of any visible damage to the roof, such as leaks, cracked, loose or lifting shingles, missing fasteners or shingles and excess granule loss.
Such issues make the roof more likely to suffer catastrophic damage during a hurricane or other severe weather event. Major leaks can result in widespread water damage throughout the home, significantly driving up the cost of a home insurance claim.
2. The HVAC System
Home HVAC systems typically have a lifespan of 15 to 25 years, with factors such as level of use and following maintenance guidelines playing a key role. If you live in an older home, you likely don’t have the original HVAC system anymore — and that’s a good thing! Newer HVAC systems are much more energy-efficient, which can help you save big on summer cooling expenses.
That being said, an HVAC system is still one of the costliest items to replace during an insurance claim — which is why it is part of the four-point home insurance inspection.
The inspector will check the age and overall condition of the HVAC system for their report. They will check for leaks and other potential performance issues that could increase the likelihood of the HVAC appearing on a future claim.
It’s also worth noting that a lack of a central air and heating system can increase a property’s risk for damage. Air conditioning helps remove excess moisture from the air. An older home that doesn’t have central air will naturally have much higher indoor humidity, subsequently increasing the risk for major maintenance issues like mold growth.
For the plumbing portion of the four-point home insurance inspection, the inspector will check the water heater, drain and supply lines, visible pipes and plumbing fixtures.
Unsurprisingly, they will check for leaks and corrosion. The age of the hot water heater is another key issue that is noted during this inspection. Most hot water heaters last eight to 12 years, so they will likely need to be replaced much sooner than your HVAC system would.
In older homes, the materials used for plumbing can pose an issue when they are no longer compliant with current building codes. For example, polybutylene pipes were frequently used for plumbing supply pipes from 1978 to 1995.
However, their high failure and leak rate meant they were no longer used after 1996. An older home that still has these pipes is at a much higher risk of significant water damage from a pipe failure. Lead pipes are another cause for concern due to the health risks posed to residents.
Other common plumbing issues in older homes include the use of an “S” trap instead of a “P” trap, which can result in the release of methane gas from drains. The use of an improper or outdated discharge tube for the water heater’s pressure relief valve can also increase the risk of water heater issues.
4. Electrical Systems
Electrical systems have experienced significant advances over the years. For example, in the 1940s, homes typically used a knob and tube wiring system. In the 60s and 70s, aluminum wiring was more prominent. Cloth covered wires were used from the 20s to the 60s.
These wiring methods are no longer used, in large part because they were found to present an increased fire hazard. Despite this, they remain in place in many older homes that are yet to upgrade to safer, modern wiring systems.
Older electrical panels, such as Federal Pacific Electrical and Challenger Electrical are no longer used because of issues like failing to trip the breakers when overloaded, increasing the risk of overheating, fires and electrocution.
The poor design and materials of these older electrical panels do not meet modern safety requirements, and pose a significant risk to all occupants in a home. Despite this, the panels were never recalled, and so some are still present in older homes.
Other signs of an outdated electrical system include the use of two-prong outlets or not having GFCIs in bathrooms or kitchens. These outdated electrical features increase the risk of fires and electrical shock.
If your home has two-prong outlets, you also likely won’t be able to use many modern appliances and electronics, which use a third prong to provide protection against faults and shocks.
Outdated electrical systems increase your likelihood of filing a claim because they increase the risk of house fires or electrocutions. Even when the weather is perfect, they still present a risk.
Scheduling a 4-Point Home Insurance Inspection
While the idea of scheduling a four-point home insurance inspection may seem stressful, the good news is that it is relatively straightforward.
Many insurers have recommended inspectors that they work with, but you can also select your own inspector. Many of the same companies that provide home inspections for when you buy a home also provide four-point inspections and wind mitigation inspections.
If you are buying the home, the standard home inspection will also cover the items needed for the four-point inspection. You could then supply the results of the standard inspection to the insurer.
In most other circumstances (such as when you are renewing your policy or shopping around for a new provider for your older home), the four-point home insurance inspection will be the better option.
Since it only covers these four areas, it will generally be faster and cheaper than a complete home inspection. A four-point inspection can be completed in as little as half an hour, while a full-home inspection may take up to three hours.
You can typically expect to pay between $50 and $200 for the inspection, depending on the company you use and the size of your home. After the inspection is complete, the inspector will compile a report and send it to you or your insurance agent.
Once you send the inspection report to the insurance company, their underwriters will use this information to determine your rate and whether or not they will provide coverage for your property.
What Happens If Your Home Fails the Inspection?
Your home can’t actually “fail” a four-point home insurance inspection. Similar to a standard home inspection, the purpose of the report is simply to report on the condition of the property and make note of any recommended maintenance tasks.
That being said, you could “fail” the inspection in the sense that an insurer may not be willing to issue coverage if your roof, HVAC, electrical or plumbing are too old or in poor repair.
What happens after an insurer receives a “poor” four-point inspection report will likely vary from company to company. For example, some underwriters may allow you to maintain temporary coverage for 30 days so you can fix the problematic items in the report.
If you fail to complete the required repairs during this timeframe, they will then drop your coverage. Other insurers may continue to provide coverage, but they will charge a higher premium unless you make recommended updates to your property. The decision ultimately comes down to how much risk an insurer is willing to take in providing coverage for your older home.
Regardless of an individual insurer’s decision, however, you would be well served by addressing any serious issues that come up in your four-point home insurance inspection. After all, it’s much better to replace outdated wiring and outlets than it is to find yourself trying to replace lost property after a major electrical fire.
By implementing the suggestions in your inspection report, you can have confidence in your ability to maintain home insurance, while also having peace of mind knowing that your home is safe and in good condition.
Get the Help You Need to Understand Home Insurance Needs
While not everyone needs to obtain a four-point home insurance inspection, it is pretty much a requirement if you want to purchase a policy when living in an older home. Insurers do this to protect their bottom line, since Florida’s coastal geography makes it a higher-risk area to begin with.
Of course, your actual risk can vary depending on where you live in the state, the age of your home, improvements you’ve made to your property and other factors. Because of this, your coverage needs could vary considerably from someone who lives just a half hour down the road.
Worth Insurance can help you navigate this complex insurance market.
By helping you shop and compare free quotes from Florida insurance companies, you can find the level of coverage you need at a price you can afford. You can have peace of mind knowing that you’re financially protected, no matter how old your home may be.