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Did you know that if you are planning to buy an older home that your Insurance Company will most likely mandate a 4 Point Inspection of the property?

What Does a 4-Point Inspection Cover?

A 4-point home inspection examines the important aspects necessary for the proper functioning of a house. These systems are:

  • Electrical System: An electrical inspection identifies faulty or outdated wiring, lack of earthing, or overloaded circuits.
  • Plumbing Systems: Plumbing inspection examines issues in the toilets and sinks for pipeline damages, leakages, corrosion, damaged fittings, and more.
  • HVAC: HVAC inspection includes an examination of a home’s heating, cooling, and ventilation systems. It looks at its electrical components, airflow, general maintenance, and system failures.
  • Roofing: A roof inspection identifies leaks, mold, wear and tear, or structural issues in a home’s roof.

Do You Need a 4-Point Inspection?

If you’re buying an older home, you might need a 4-point inspection. Older homes are more likely to have structural problems or damage because of their age. However, if you’re buying a new home, this inspection is not necessary.

When obtaining or renewing home insurance, a four-point inspection is necessary for insurers to assess potential liabilities. You might have to repair any significant issues that the inspector identifies in your property.

Here are some things you may encounter if an inspector identifies some major problems:

  • Risk Mitigation Requirements: The insurer may give you a timeline to fix the identified issues.
  • Increased Premiums: The insurance company adjusts the premium rates based on the risk factors involved. Higher premiums help offset the increased likelihood of claims.
  • Policy Limitations or Exclusions: Insurers may impose limitations or exclusions on coverage of specific types of damage.
  • Risk-Based Underwriting: Insurance companies evaluate the overall risk profile and the likelihood of claims. Homes with a higher risk may face stricter underwriting criteria.
  • Policy Non-Renewal or Cancellation: In severe cases where significant risks cannot be managed, the insurer may choose not to renew the policy. This is usually a last resort to avoid potential large payouts.

How Much Does a 4-Point Inspection Cost?

A four point home inspection can cost between $150 – $350 on average. However, this cost varies significantly depending on the state or insurance company. Likewise, the property’s age and insurer’s requirements also influence the cost of a four-point inspection.

4-Point Inspection vs. Home Inspection

A 4-point inspection focuses only on four major home systems. Insurance companies rely on the inspection report to determine the insurability of a house and set insurance premiums.

On the other hand, a home inspection is a detailed examination covering multiple house components. A home inspection aims to produce a comprehensive report on the house’s overall condition. It is highly recommended for most buyers, as it helps them make an informed decision when buying a house.

 How to Pass a 4-Point Home Inspection?

Insurance companies have specific requirements that a property must meet to be eligible for insurance coverage. To ensure that it meets these requirements, here are some steps you can take:

  • Research or read up a little about common issues found in the components that will be inspected. These issues include roof damage or common plumbing issues.
  • Check for visible signs of water leakages, damages, loose or exposed wires, or malfunctioning devices.
  • Schedule regular maintenance checks to ensure smooth operation of the systems.
  • Call in a plumber, electrician, roofer, or HVAC professional to repair any significant issues before the 4-point inspection.

Bottom Line

Getting a 4-point inspection is necessary if you’re looking to buy an old home or want to get home insurance. While a four-point inspection addresses insurance concerns, buyers can also get a thorough home inspection to understand the property’s condition.

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