Managing Home Insurance Inspections

It's part of the process. If you move your homeowner's insurance from one company to another, often to save money, the company may send someone by to have a look at what it's insuring.

It makes sense for the insurance company to do this, and it can actually save lives in the process by pointing out hidden dangers, but it can also cost the company money. So pay attention to details, and ask polite questions.

What Is the Company Looking For?

First, insurance inspectors want to measure a home to determine its value and the replacement cost to the insurance company in the event of a total loss. This replacement cost to the insurance company then determines the insurance rate they charge the homeowner.

Often insurance sellers will underestimate home size to charge a more competitive rate and win new accounts, but they are also insuring that home for less than it's worth. Sometimes homeowners may mistakenly insure a house for much more than it's worth when it isn't necessary to pay that high a rate.

By assuring the actual size of the home, insurance companies can not only more accurately charge for insurance, but homeowners can avoid a nasty surprise should they lose their home to disaster and find they can't afford to replace it as they were once told.

This said, professionals do make mistakes, so go over the insurance company's report very carefully. Did they accidentally double count that garage you converted to a bedroom? This could impact your regular payments. Did they not see the deck? Use a smartphone camera and email pictures to the insurance company to refute square footage claims. Always be sure to include your policy number so they know whose bill to adjust. They will have their experts make a decision, or perhaps order a new inspection.

Always Err on the Side of Safety

The other thing the insurance company is concerned about is the safety of the home, the family and the neighbors nearby. An accident or disaster can cost them an awful lot of money, and reducing such risk is in their best interest too.

The inspector will look at things like the condition of trees near your home that could fall over in a storm, the condition of your sidewalks, the condition of your heating, plumbing, electrical and sewage, kitchen and smoke and carbon dioxide detection systems. This is where homeowners get real benefits from an inspection.

Little things may have been overlooked. These could prove disastrous in the long run. Is the boiler properly bolted to the chimney pipe, or did the oil company just duct tape it in a hurry? Is the dryer vent pipe too long and unmaintained? Is there a stack of newspapers too close to the toaster?

These are little things that can turn into life-threatening situations if ignored, and the value of learning of these issues could be invaluable to you. But things are not always what they appear to be, and before rushing out and paying professional plumbers and electricians a ton of money to correct major findings, you might first pay them for their professional opinion about the repair.

For example, there may be an old "piggyback" fuse box with one or two fuses attached to your electric dryer. This is a red flag for inspectors trying to determine if your electrical system is safe and up to date.

But a quick check of the circuit breaker box in the garage may show two separate circuit breakers linked and marked "Dryer." A homeowner can prove this is correct by having a spouse stand at the running dryer while the other homeowner turns off the circuit breaker. If it controls the dryer, the circuit may be safe.

Still, the insurance company should not take a homeowner's word for it unless that is backed up by a licensed electrician, because homeowners need to be certain the family is safe. It's the family sleeping there every night, not the insurance company.

If the facts are in a homeowner's favor, the insurance underwriters will often excuse them from that specific repair. If not, they may have saved their life, it not money. Homeowners know their homes better than anyone, but a wise person welcomes a free safety inspection from an objective expert any time it's available.

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