What Happens When You Don't Pass Your Homeowners Insurance Inspection

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What Happens When You Don’t Pass Your Homeowners Insurance Inspection

If your home is over 25 years old, it is possible that you will be required to have a homeowners insurance inspection within the first 60 days of your policy's start date. Inspections are designed to ensure that your home properly matches your insurance application and also satisfies the insurance company's underwriting guidelines.

While not all homeowners will need an inspection to get homeowners insurance, it is becoming more common. Over $190 million was spent on homeowners insurance inspections this year. Of those, less than 25% turned up problems that stopped or prevented coverage. 

When a Home Inspection is Required

If you are buying a new home, you will likely need to get an inspection as part of the home buying process. Unfortunately this will usually not satisfy the insurance company - they will want to do their own inspection. Florida would be the exception here, accepting the 4-point home inspection and/or wind mitigation inspection report.

If an inspection turns up major issues that would prevent you from securing insurance, the seller usually is required to make the repairs prior to purchase. This is great news if you are the buyer, as you will gain confidence you are buying a home in safe and livable condition. As a seller, here is how to pass your home inspection.

When You Fail Your Inspection

If you fail an inspection for homeowners insurance, there are three options:

  • The insurance company outright refuses to insure your home, in which case you will need to shop elsewhere. Don't worry, you still get some time where you are covered while you are looking for new coverage.
  • The insurance company will insure your home contingent upon making repairs, usually within 30 days.
  • The insurance company insures the home, but will non-renew for policy in 12 months unless the repairs are made.

If you fail an inspection with one company, you will often fail the inspection for another company. Take the advice of the report and repair what is recommended. The insurance company is making the recommendation because they want to reduce the probability of a disaster at your house. If you choose to ignore that, it means an expensive disaster is much more likely. Hope that helps!

At your service,
Young Alfred