Do You Need an Inspection to Get Home Insurance?

A home inspection is a visual exam of the exterior and interior of a property. You may be surprised to learn that you don’t always need one to purchase a home insurance policy.^[1] The insurance company can decide whether it would like to make a home inspection mandatory.

Here’s what you need to know about home insurance companies that don’t require home inspections and why.

Inspections and home insurance

Whether you’re buying or selling a home, a home inspection will likely be part of the transaction. During a home inspection, a professional inspector will visually inspect the home’s major systems and components, such as its HVAC system, roof, ceilings, walls, windows, doors, and floors. They’ll also take detailed notes and photos to share with the seller and prospective buyer.

The primary goal of a home inspection is to uncover major issues that can impact the negotiation of a real estate transaction. It’s important to note that while an inspection can tell you a lot about a property, it may not detect all problems, like hidden mold, asbestos, or pests.

The home inspection typically occurs after the seller has accepted an offer but before a property has been officially purchased.

Inspections are also common when you begin working with a new home insurance provider. Most home insurance companies require a home inspection because it allows them to do their due diligence and evaluate the risk of insuring a home. Not surprisingly, a home inspection often plays a significant role in what you’ll pay for your home insurance premiums.

What is a four-point home inspection?

A four-point inspection is a thorough examination of four major systems in your home, including the:

• HVAC system: The HVAC system controls the heating, ventilation, and air conditioning in your home. The inspector will make sure the system is functioning as it should and there are no risks of fire or other damage.

• Electrical system: The electrical system powers the property and involves the wiring, electrical panels, switches, outlets, and smoke detectors. The inspector will try to evaluate the condition of the system.

• Plumbing system: The plumbing system must be in good shape or it can lead to burst pipes and overflowed toilets. While they evaluate the plumbing system, the inspector will keep an eye out for leaks and cracks.

• Roof: Since a compromised roof can lead to serious issues, the inspector will look at its age, wear and tear, and signs of leaks and cracks.

In most cases, an insurance company will only require a four-point home inspection if you’re considering an older home. This is because these systems are more likely to break down or pose serious hazards in a home that’s 30 years old compared to one that’s brand-new.

Learn More: What Is Force-Placed Insurance on a Home?

Instances when insurance companies don’t require an inspection

Fortunately, a home inspection isn’t always mandatory to purchase homeowners insurance. Your insurance company may decide a home inspection is not necessary if your home:

• Is less than 25 years old

• Was already recently inspected

• Was recently rebuilt after a fire or other disaster

• Doesn’t sit on a floodplain and isn’t located in an area prone to other natural disasters

Avoiding an inspection

“Occasionally, insurance [companies] do not require an inspection for many reasons,” explains Shannon Seel, client services director and licensed insurance agent at Bickle Insurance Services. “Most commonly, the home is new and/or had an inspection done within the last few years. If this is the case, companies may see that the house is still fit for a policy without inspection; however, this doesn’t mean you won’t need one down the road.”

If your goal is to skip an inspection, your best bet is to look for a newer home or one that’s recently been inspected. You can also try to find an insurance company that doesn’t require one. But if you’re considering a home that’s more than 30 years old, there’s a good chance you won’t be able to avoid an inspection.

Things to know before you skip the inspection

In some situations, having an inspection is important and even imperative, Seel says. “You should definitely opt for a home inspection if the home you’re interested in is older, you’re going from one insurance company to the next, or you haven’t seen the home in person and only have photos to look at,” adds Seel.

By investing in a home inspection, you can ensure you understand major issues early on. If you forgo an inspection, there’s a good chance you’ll eventually discover hidden problems that cost you more in the long term.

A home inspection may also help you ensure you’re paying a fair price for your property and give you some much-needed peace of mind.

Appraisals and home inspections

Some home insurance companies will approve you for a policy with an appraisal instead of a home inspection. An appraisal is intended to evaluate the value of a property. It differs from an inspection, which aims to find major issues with quality and construction.

While an inspection can help the buyer by explaining the condition of a home, an appraisal helps mortgage lenders set the loan amount based on the home’s fair market value. An inspection is far more detailed than an appraisal. The latter simply states whether a home is priced fairly.

Keep Reading: The Homeowners Guide to Home Appraisal for Insurance Purposes

How to prepare for a home insurance inspection

Preparation is key to a successful home inspection. Seel suggests the following tips to prepare:

• Inspect the HVAC, plumbing, and electrical systems. Correct any issues you find.

• Examine the home’s foundation for any cracks, water damage, mold, or mildew. Rectify any problems.

• Check the roof. Replace any loose or missing shingles.

• Inspect the chimney for any cracks, holes, and missing bricks. Fix accordingly.

• Clean out any gutter blockages. Make sure the gutters are properly fixed in place.

• Inspect doors, windows, walls, and ceilings for cracks, stains, and water damage, and test their seals.

• Examine your basement and attic for any leaks, cracks, or traces of animals.

“After the inspection, the insurer will take all the information gathered into consideration and will then determine if there are any changes that need to be reflected in the policy,” says Seel. “Not allowing an inspection could result in the insurer canceling or non-renewing the policy, which could cause problems later. We always tell our clients it’s best to be open and honest with their insurer because your risk is our risk. We know you have worked hard for everything you have and how quickly it can be lost.”

How much does a home inspection cost?

Home inspection costs vary and depend on a number of factors, like the location, size, and age of the property, inspector experience, and scope of services. On average, however, you can expect to pay anywhere from $300 to $500 for a home inspection.^[2]

In general, an older home or a home in an area with a higher cost of living will be more expensive to inspect than a newer home or a property in a rural town. Of course, a larger home will require a longer inspection than a smaller home and may therefore cost more as well.

Can you get home insurance if your home fails an inspection?

If your home fails a home inspection, you may need to resolve the problems before a home insurance company approves you for a policy. If a provider does approve you for a policy, it will likely contain a stipulation that states you must make certain repairs within a period of 30 days or so. If you don’t perform the repairs on time, your policy will become invalid.

A surplus line policy, often referred to as builder’s risk insurance or vacant property insurance, may be worth exploring if you don’t qualify for home insurance because your home requires renovations. This type of insurance is more expensive than a traditional home insurance policy but can give you the coverage you need while you work on your home. You can also look for insurance through your state’s FAIR plan as a last resort.

How to choose a home insurance company

As you shop around for a home insurance company, keep these factors in mind:

• Rates: Home insurance prices can vary dramatically. That’s why it’s well worth your time to shop around and compare the rates of similar policies. Comparison shopping may save you hundreds of dollars on your home insurance. To receive several quotes in seconds, all you have to do is fill out a short online form.

• Customer service: Before you commit to a home insurance company, read customer reviews to get an idea of its customer service. You should choose a provider that prioritizes its customers and offers prompt, reliable service.

• Financial stability and reputation: Some home insurance companies are more reputable than others. Ideally, go with a company that’s been around for a while and consistently earns high ratings from A.M. Best, Moody’s, Standard & Poor, and other independent agencies.

Home insurance and home inspection FAQs

Here are answers to some frequently asked questions about home insurance and home inspections.