What’s the Point of a 4-Point Inspection?

 By Catherine Powell

Image courtesy Pixabay

If you’ve ever purchased a home, you’re no doubt familiar with what’s deemed a home inspection.  That’s because before you can close the deal, your bank will require an in-depth inspection before you qualify for a mortgage.  A typical buyer’s inspection can take between two to three hours to complete.  It’s designed to home in on any structural, plumbing and/or electrical deficiencies in a home.  Once passed, you’re on your way to securing the financing needed to own a home.  A 4-point inspection, on the other hand, takes less than an hour to complete.  It can be required to insure older homes, particularly if they’re located in coastal areas that experience a lot of storms.  That means if you own or are looking to purchase a home that is more than three decades old, you could wind up being told by your insurance company that this kind of home inspection is going to be necessary to acquire or renew your homeowner’s policy.  Here’s what you need to know about 4-point home inspections.

1. Why are 4-point inspections required? If you live in Florida like I do, you know that it’s only a matter of time before a hurricane or named storm makes landfall.  Between 2000 to 2020, there were 79 tropical systems that made landfall in Florida.  These resulted in more than $123 billion in damages.  They also caused 339 deaths.  As a result, building codes were stiffened to require added protection for new home construction.  Homes built prior to 2000 weren’t built to the same standards as those of more modern times.  This makes them more prone to storm damage.   
2. Why do insurance companies rate older homes differently than newer ones?  Storm damage potential aside, the reason some insurance companies are reluctant to insure older homes is due to deficiencies in internal components that can cause everything from fires to water damage that can prove costly to repair.  As a home ages, everything from the roof above your head, to the pipes and wiring located behind the walls can deteriorate.  This means it’s more likely for an insurance claim to be filed for an older home than a newer one.  That being said, while a full inspection takes into account everything from structural integrity and insulation to fixtures and appliances, a 4-point inspection only assesses the condition of the four main components of a home:

a.      The Roof – If your asphalt shingle roof is more than 20-years old or your tile or metal roof is more than 40, chances are your home will fail a 4-point inspection.  Likewise, if your roof looks like a patchwork quilt due to missing shingles or moss growing freely atop it, you are going to have a problem getting your insurance renewed if you’re ordered to have your home inspected. 

b.      Plumbing – The inspector will look at the type and condition of pipes in your home.  If the pipes are old, corroded, or made of polybutylene, the plumbing won’t pass muster.  That doesn’t necessarily mean you can’t get your home insured unless you replace all the pipes.  It simply means your insurance company may insist on excluding water damage.  If you accept these terms and a pipe was to burst, the cost to repair the damage will be yours and yours alone.

c.       Electrical System – If your home’s electrical system has copper, aluminum, or knob-and-tube wiring, it poses a fire hazard that will cause it to fail inspection.  If your electrical panel is old and decrepit, you will have to upgrade the system to secure fire insurance from most carriers. 

d.      Heating and Air Conditioning – If your home has the original central heating and air conditioning system that was installed when the home was built, odds are it will fail inspection.  Even if the unit was replaced in the past decade or two, if it shows obvious signs of wear, tear and leaks, you may be forced to upgrade the system to pass a 4-point inspection.

3. How much does a typical 4-point inspection cost? While a full home inspection can run from $200-$400, a typical 4-point inspection runs between $50-$100.  The reason for the deep discount has to do with the fact that a 4-point inspection takes less than a quarter of the time a full inspection does.
4. What kind of report do you get with a 4-point inspection? – One of the most important things a 4-point inspection will provide you with is a detailed analysis of the condition of your home.  On it you’ll learn a lot about the condition of your home’s wiring, including any non-code installations or repairs, whether any corrosion or scorch marks are present, how well your breaker boxes meet current code standards and much more.  You’ll discover whether your plumbing, HVAC system, and roof have any issues that need to be addressed.  You’ll also be shown photos of anything the inspector feels you need to correct before the insurance company will issue or renew your policy.
5. What should you do if you fail a 4-point inspection? – Don’t panic.  Contact your insurance company to find out if they agree with the inspector’s assessment.  It’s up to the underwriter to decide whether to issue or renew your insurance.  Even if the underwriter agrees with the inspector, the underwriter may be willing to extend a grace period to give you time to correct any deficiencies.  Some insurers will allow up to 60 days for repairs to be completed before pulling a policy.  If you’re trying to sell your home, talk to your realtor.  It’s possible you’ll be able to work some of the repairs into the contract.  This may require you to get estimates from contractors, but it could save you thousands of dollars on repairs that will fall to the buyer.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/