Can I Get Homeowners Insurance Without an Inspection?

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Jeff Bray
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There are two things home shoppers look for. The first is for a house that will last. A home is a considerable investment. When money is spent, it could be desired to have a legacy that remains within the family. Second, speaking of money well-spent, cost is crucial. The same can be said of homeowners insurance. One doesn’t want to overpay.

Obtaining home insurance begins with an inspection of the residence. But is one always necessary? What if you find the right house at the right time? Can you get homeowners insurance without an inspection?

Key Takeaways

  • You can purchase Home Insurance with or without an inspection. It is not mandatory to obtain a policy

  • Home Insurance inspections are designed to ensure replacement cost accuracy as well as uncover other risks not listed on the homeowner’s policy application

  • There are various types of home inspections. The four primary are: Exterior, Interior, Four Points, and Full Inspection

Can I Get Homeowners Insurance Without an Inspection?

It takes a home just about 36 days to proceed from listing to contract in today’s housing market. A home inspection will most likely be part of your home purchase journey, especially when it comes to obtaining homeowners insurance. You want to protect your investment, and the insurance companies want to evaluate their risk. However, in some instances, you can proceed with your purchase without having an inspection.

First of all, a home inspection will reveal any issues the home may have and allow the seller the opportunity to correct them before the property changes hands. These inspections will look at all the home systems, like:

  • HVAC and other built-in systems
  • Roof, ceilings, and attic space
  • Walls and flooring.
  • Doors, internal and external
  • Chimney and fireplaces
  • Smoke detectors and anti-theft systems

According to a Statista study in 2022, 5.8 million existing home sales took place. This is compared to just over 640 thousand newly built homes. When looking at an existing home, one needs to know about issues that can exist so that the purchaser can consider them before the purchase. This is one reason an inspection can benefit the buyer.

In certain instances, a shopper may be able to obtain home insurance without an inspection. These can include:

  • The home is less than 25 years old.
  • If the home has been recently inspected.
  • A rebuilt home after a fire or other disaster.
  • When the home does not sit on a floodplain and isn’t located in an area prone to natural disasters.

However, suppose your home hasn’t been inspected for the past 10 years, or is an older structure. In that case, it is difficult to determine accurate replacement cost. Another consideration would be if you are switching insurance providers, all these would require a home inspection.

Consider Claims: In addition to obtaining insurance, look at an insurance company’s claims satisfaction when seeking coverage. According to J.D. Power, the average claim takes 22 days to complete.

Can I Use an Appraisal to Get Home Insurance?

First, let’s talk about what an appraisal is. A home appraisal is an evaluation to know the value of a home before you purchase it. To keep it in context, this is not an inspection. As we discussed a moment ago, the inspection is a detailed checklist of your home’s known issues.

An appraisal consists of factors such as market value, improvements you’ve made to your home, and comparisons with other homes in your neighborhood. It’s basically a snapshot of the home. It tells the insurance company what would be needed should there be a disaster and the home needs to be replaced.

There are a couple of different types of appraisals to consider after determining the fair market value of the property:

  • Insurance Appraisal: This appraisal is basically the skin and bones: how much the home and property are worth. It is not a concrete number.
  • Homeowners Insurance Appraisal: This type of appraisal will include everything that is inside the home. How much will it cost to repair the home and replace your belongings? Be aware that your belongings are replacement value depending on which type of policy you purchase: Replacement Cost or Actual Cash Value.

An appraisal can be important, as it will help you determine how much insurance you require. In some cases, you can purchase home insurance with only the appraisal. Since an appraisal is looking at the fair market value, it can be a tool insurance companies use to approve for coverage in lieu of a home inspection. It helps if the house is newer and perhaps has had a recent inspection. At the end of the day, the decision solely rests on the insurance company that will provide the home insurance policy.

Types of Home Insurance Inspections

There are three primary types of home inspections: the interior, exterior, and four-point. Then, there is a fourth that encompasses everything: the full inspection. Each inspection will vary depending on where you live and what type of home you are purchasing.

Here is how each type of home inspection breaks down:

Exterior Home

This type is just as it sounds. An inspection of the outside of the home. This will include photos of the house from all four sides, the rooftop, and all other structures, such as a detached garage, shed, and chimney. The report will include the type of material the home is made of, the size of the property, proximity to other dwellings, if the house is near drainage or emergency equipment such as fire hydrants, and any negative conditions.

Interior Home

An interior home inspection usually only applies to older homes and is used to determine the home’s current condition. It aids in determining a home’s replacement cost and if any systems need to be replaced. The main areas an inspector checks during an interior home inspection are the electrical system, including HVAC, interior walls, plumbing, and security devices if the home has them.

Four Point

This type of inspection is well known because it is the type that most insurance carriers require when they consider a property insurable. A four-point inspection evaluates the four major components of the home: the electrical system, the homes plumbing, the heating and A/C (HVAC), and the dwellings roof. We will go into this type of inspection in our next section.

Full Inspection

A full inspection is just as it sounds. All the above, but in greater detail. This would be most common for high-value homes. Here, you get into such things as the foundation of the home, checking for cracks and unevenness, checking for blockage of gutters and chimneys, and examining the home for water damage, mold, and infestations.

What Is a 4-Point Home Inspection?

We mentioned a 4-point home inspection a moment ago. We gave brief details about it entailing the electrical, HVAC, plumbing, and roof of the dwelling. Here is a bit more detail of each of those sections.

Electrical

Your electrical system includes the properties electrical panels, all the wiring, outlets, and switches. Even smoke detectors and alarm systems are included.

HVAC

A home’s heating, ventilation, and air conditioning system controls the climate of the home. The inspector checks these systems to ensure there is no damage that would cause the system to malfunction or cause a fire.

Plumbing

The inspector looks for plumbing systems issues to ensure the home is safe from plumbing issues: leaks, cracks, or signs of water damage telltale signs that greater issues may exist.

Dwelling

The main component here is the roof. Wear and tear to shingles or within the attic space can lead to leaks and cause damage to the internal space within the home.

Virtual Tour Fact: In December 2021, 6% of buyers bought their home solely based on a virtual tour without physically seeing the home.

How to prepare for a home insurance inspection

So, you have a home inspection planned. You want to be able to pass it on the first go around because, as you are well aware, having to schedule an inspector’s visit was a difficult process in the first place.

If they find issues, they need to come back. You are now given a time frame of 30 days to complete repairs. If you fail to do so, your policy will become invalid.

To help avoid this situation, there are steps to take to prepare for your insurance evaluator. If you find issues, you can correct them before the inspector comes out.

Here are some things to look for. Check your:

  • HVAC, plumbing, and electrical systems. Signs of water damage or wiring issues. Fix accordingly.
  • Home’s foundation for damage. This will be the most significant issue. It can include cracks, water damage, and mold. More extensive would be a foundation issue, which could cost up to $10K or higher.
  • Roof and chimney. Look for missing shingles and bricks, tears and cracks.
  • Drainage. Clogged gutters and drainpipes.
  • Entrances and exits. Door and window seals, panes, and glass; examine for tears and breaks.
  • Basement. This will include looking for leaks, cracks, or signs of infestations.

In 2022, 24 percent of buyers waived the inspection contingency. This was up from 19 percent in 2021. Also, eighteen percent waived the appraisal contingency. This was down from twenty-one percent in 2020. However, you need to determine the condition of your home based on facts, not the urgency of wanting to get into your home.

Finding and repairing issues can help your inspection pass on the first go around and increase the value of your home.

How much does a home inspection cost?

A home inspection cost depends on numerous factors. Where you live is one, as is the age of the property—size matters here, as well as how good the inspector is. A seasoned inspector can uncover issues a less experienced could miss. On average, a home buyer can expect to pay between $300 and $500 for a home inspection.

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

No matter how much preparation you do for a home inspection, there is the possibility your home will fail an inspection. Do not fret, though. It does not mean that you will not be able to obtain home insurance. It simply means that there will be a few things you need to fix before you are approved for your policy.

The one thing you need to be aware of is that you do have a time limit to complete these repairs. When you fail a home inspection, you are given 30 days to complete repairs, or your policy will become invalid.

FAQs

What makes a home uninsurable?

Most homes are insurable. There are only a handful of reasons an insurance company will deny a home insurance policy. If a company believes the home has faulty construction, has unrepairable maintenance issues, or if the applicant lies on the policy.

Can you refuse a home inspection?

Yes, this is an option, as you can obtain insurance without an inspection. However, it is not advised because your policy application can be denied, thus increasing your insurance rates.

Why do insurance companies conduct home inspections?

As with all insurance companies, home insurance is about the likelihood that the insured will file a claim. An inspection helps the insurance company assess the risk they will be assuming.

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