When you buy a house, your lenders want proof of insurance, along with an appraisal supporting the purchase price. Lenders don’t require a home inspection and your homeowner insurance company doesn’t either. So when do insurance inspections happen?
When a visitor to this blog told me her insurance company inspected her home, I was curious. She asked for help and here’s what I learned talking to my personal insurance agent plus online research..
Home Tips Reader Asks For Help …
After reading 8 Wood Rot Repairs Your Home Might Need, Dee Dee left the following comment:
“My insurance company completed an inspection and found dry rot in our house. They won’t renew our homeowners insurance until all repairs are done. My question – what kind of expert do I look for? Do I look for a Handyman, Carpenter, Contractor? I’m totally lost on where to even start looking.”
To gain enough information to provide advice, here was my response:
I need more information before I can give you a recommendation.
First I’d like to understand what prompted the insurance company to inspect your home. Did you have a claim that they might want to verify was corrected properly? Did they find a small area of wood rot? Did they document what they found and give you a copy? Did they suggest where the water came from that caused the wood rot?
With my handyman business, most large wood rot problems were associated with the improper installation of a deck. When the ledger board that attaches the deck to the house isn’t flashed properly, water gets behind the board and into the house. You can learn more about wood rot in my articles on this topic, starting with Wood Rot & Decks.
Given the insurance company’s reaction, I’m guessing there is wood rot affecting the structural integrity of your home. This is serious because once load-bearing wood disintegrates, there can be extensive damage. On the other hand, I’ve met insurance representatives at houses and the repairs haven’t been that serious. Sometimes they’re looking for reasons to deny a claim when the problem isn’t new but due to a lack of home maintenance over many years.
Here’s Dee Dee’s response which prompted my research and this article (from an email):
“This whole situation is frustrating for me. I know the repairs need to be done but this whole story gives me a bad attitude towards Allstate. I’ll try and answer your questions.
I have no idea what prompted Allstate to do this inspection. This is the maddening part. They completed the inspection back in September of 2017, a whole year ago. I never received anything from Allstate until I received a non-renewal notice on our homeowner’s insurance in mid-September of 2018, a year after the inspection was done. When I got the non-renewal letter, I emailed my insurance agent and asked for a copy of the inspection. They said they did receive a copy of the inspection a year ago, but neglected to forward it to us!
The agent said they had no idea where the water came from or any suggestions on what to do. They just gave me a date of non-renewal which is November 6th. They said they could extend the non-renewal date out to January 5, 2019 but only if I produce a letter of agreement with whatever repair company I choose.
There is some rotting of the boards all along the bottom of the house. To me, it looks like it is rotting from rain splashing up onto the bottom of the house. I’m praying that this hasn’t affected the structural integrity of our house.
I honestly can’t remember how I found your website. Do you have a company that does repairs here in Austin or is it just a website that answers people’s questions?”
Insurance Inspections Are Done Randomly
Yesterday I provided Dee Dee with the following information about insurance inspections:
- Allstate does random insurance inspections every year. These vary by state to insure they adhere to each state’s insurance laws … so this information is for New Hampshire (and Dee Dee lives in Texas).
- Allstate’s random inspections are “external” inspections meaning they don’t ask to enter your home. They are looking for problems with your roof, siding (any missing), exterior stairs, etc. Other insurance companies may inspect your home’s interior but not in New Hampshire.
- The insurance company sends a letter letting you know when they plan to inspect your home. My insurance agent said this is typically done six to eight months before your policy’s next renewal.
- Following insurance inspections, the company should notify you about any issues found. Sadly this doesn’t appear to have happened in Dee Dee’s situation which is why this experience has been so negative.
- My agent said in NH, the inspector notes & photos are stored in a database that he can access at any time. He said you should be able to get copies of all this information so you know what issues were found. He called the areas needing repair “the scope of concerns.”
Wishing you luck with everything, both technical and the paperwork. Please stay in touch as you get things cleaned up.
Your home is a living, breathing puzzle with lots of moving parts. When you learn how to respect your house and take care of it, you’ll avoid these problems and save money too. Use our home maintenance checklists to insure you’re always ready for a home insurance inspection!
Good info.Thanks
I switched insurance to The Hartford early this year, and my 1940 house required and an interior and exterior inspection. I found this very invasive and wouldn’t have signed up for it if I had known that. I’m not against an exterior inspection, but snooping inside my house really put me off.
Essie, I understand how you would be upset to learn about the interior inspection after the fact. It should have been explained before you signed up for the policy so you could rethink your decision.
At the same time, I’d like to point out some benefits of this inspection. That’s because too many homeowners have neglected preventive home maintenance for years. This often leads to more frequent repairs, and more costly repairs. So here’s what you’ll gain from both the interior & exterior inspections which I’m guessing are similar to what a home inspector will review before you buy a house.
Following the inspections, your insurance company should send you a report listing what they found … and yes, what repairs they want you to make to continue coverage. Make sure you get this report promptly so you have time to make repairs and/or negotiate a repair timeline you can afford.
I’m a third party home insurance inspector and we do inspections for about 15 different insurance companies. 95% of our inspections are exterior and just a handful per month interior. I totally understand why people could consider the interior ones invasive and I feel like I’m being invasive while doing them, even though I try to be as respectful as possible.
One of the things that adds to the difficulty is most of the time, the agent or company has not given the policy holder a heads up about the inspection.This could really be smoothed over with better communication from agents and I do realize many of these policies are now purchased on-line or via telephone, but still it could be handled better.
I would say in our area the thing we find most common to be a problem is wood stove installed improperly. They are not just a claims hazard, but a safety hazard, so in that regard we are doing them an important service.Electrical service is also pretty important. I’ve never understood why some companies want pictures of every bedroom and bathroom though. That feels very invasive.
Bob, Thanks for sharing your first hand experience & especially that there are benefits for homeowners like knowing that your wood stove isn’t installed properly. You are so right about poor communication which I’m experiencing first hand. My gut says insurance companies want homeowners to be as ignorant as possible so they can play their games with little interference. As I’m about to hire an attorney for my flood claim, I’m learning a whole lot more about this industry and it isn’t nice.
Homeowners need to read their homeowner insurance policy before it goes into force, to learn how many hidden caps are buried to minimize what an insurance company will pay … as you don’t need these surprises when dealing with an emergency.
Do you know how long an insurance company has to inspect your house after you start your new homeowner policy? I paid for a new insurance policy on May 16th. The inspector has not come out.I have two different policies on the same dwelling thinking that I would have plenty of time to cancel the old one. What is your best advice? Stay with the old policy or risk canceling the old policy and waiting for the inspector to come. I’m desperate, since my old policy has to be paid tomorrow! Yikes
Patricia, There are a lot of parts to this question:
Hope this information will help you make your decision. If you want to keep your old policy in force, see if you can make an installment (usually 1/6th) payment to reduce your short term out of pocket expenses. Regardless, please proactively maintain your home (get seasonal checklists) to avoid repairs & extend the life of expensive home features.
Thank you! I think I’ll pay on the old policy and give the new insurance people a tad more time as long as I can get a refund of the existing old policy.