Certified Four Point Insurance Inspections
The Four Point Insurance Inspection was created after Hurricane Andrew struck Florida in 1992. It is performed on behalf of the insurance companies and, typically, as a requirement for the insurer offering insurance to the new homeowner. After last year’s barrage of hurricanes in Florida, the Four Point Insurance Inspection has taken on added importance. As insurance companies are beginning to see the benefit of the inspection, the program is spreading to other areas of the country. The benefit to the insurance company is, obviously, reduced loss risk on homeowners insurance policies. This is an area of business that has, for many years, been a money loser for insurance companies.
In 2002, the Florida Legislature passed a law that combined the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and the Florida Windstorm Underwriting Association (FWUA). This resulted in the creation of Citizens Property insurance Corporation (Citizens), which more efficiently and effectively provides insurance to, and serves the needs of, homeowners in high-risk areas and others who cannot find coverage in the open, private insurance market. By law Citizens insurance must be the most expensive insurance policy on the market. It is funded by premiums paid by the insured and from other insurance companies paying into the program to reduce their overall losses.
While the four point insurance inspections were started by Citizens, they have quickly spread to most, if not all of the insurance companies that provide coverage in Florida. Several insurance agencies in the Alachua county area have been recommending the 4 point inspection for some time now.
While Citizens operates only in Florida, I know of several inspectors in other states who have transitioned their entire businesses into ones that deal only with insurance companies. There are some impressive statistics showing how this has saved the small regional companies substantial money.
The Four Point Insurance Inspection consists of a visual survey of the following four primary components:
- Roof
- Electrical
- HVAC (Heat, Ventilation & Air Conditioning)
- Plumbing
The insurance companies are expecting the condition of the components listed above to be working as intended within the manufacturer’s specifications. The insurance companies are looking for the four systems to be in generally good working condition and fulfilling their intended function. If the home is an older home the insurance companies want to see that the systems have been updated. In most cases, the forms are provided by the insurance companies to their clients. The clients then ask the inspector to fill the form out during the course of the home inspection.
The criteria used to judge the components include:
- Current operating conditions
- Scheduled maintenance requirements
- Expected service life
There are other types of specialized programs that are similar in nature to this type of inspection and may exist in specific markets. For example, some states require low income buyers to obtain an inspection of a home prior to purchase to obtain a low interest loan. In Missouri, for example, the Missouri Housing Development Corporation (MHDC) has an inspection requirement that is similar to a Four Point Insurance Inspection. Another example would be in California where many homeowner insurance companies require verification of foundation attachment for homes built prior to 1965.
Why do I need a four point inspection?
Insurance companies have become increasingly reluctant to issue Homeowner Insurance Policies on older homes (usually 25 years old or more). Their common 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.
Is there a standard form to fill out?
There is no industry wide standard form for a Four Point Inspection. Some insurance companies provide their own forms; however, most insurance companies will accept forms from companies that perform home inspections provided that they are filled out by qualified individuals.
Can I fill out the form myself?
Insurance companies want these forms filled out by certain qualified individuals such as a licensed Professional Engineer, Electrician, General or Roofing Contractor, Certified Home Inspector or an ICC Certified Inspector.
I am buying a home. Can I use this as a less expensive pre purchase home inspection?
No. This four point inspection is not intended for use as a pre sale or pre purchase comprehensive inspection. As it is geared for your insurance needs, The Four point inspection will not contain the type of information you may need to make an informed decision for purchase. .
I had a home inspection before I purchased the home. Can I use that report instead of getting a Four Point Inspection Report?
The insurance companies do not want large reports that contain other information. They want only specific information about the HVAC, plumbing, electrical system and roof in a short one or two page signed document.
Costs, Coordinating all these Trades Professionals for a 4 point Inspection sounds Costly and lengthy.
Bungalows to Mansions Inspectors are in tune with these systems and our professionals in the inspection business to offer the four point inspection at a discounted rate. If you hired all four trades to perform the inspection, it would get very expensive. We have also streamlined forms to satisfy most interests of insurance companies quickly and cost effectively to offer the four point inspection.
Guarantees, Who can Guarantee the four point inspection forms enable me to be approved for Insurance?
NONE ! Please be clear that Bungalows to Mansions Professional Home Inspection, LLC is not employed by Insurance companies, and cannot guarantee any aspect of the four point inspection, including but not limited to: INSURABILITY, UNDERWRITING, NEED FOR ADDITIONAL CERTIFICATION OR INSPECTIONS SUBSEQUENT TO INITIAL INSPECTION, WORK TO BE PERFORMED FOLLOWING INSPECTION, Etc
In summary, the Four Point Insurance Inspection program is gaining in popularity and will likely continue to expand as the insurance companies recognize the value of the inspection and the savings benefits it provides to the insurance carrier. Bungalows to Mansions Professional Home Inspection, LLC is proud to offer four point insurance inspections as part of our full line of inspection services.