Buying a home can be one of the most rewarding moments of your life. The process might be arduous and filled with paperwork, but it all pays off in the end.
Well, before you buy the house of your dreams, you’ll want to make sure it can be covered by homeowners insurance first.
To be eligible for a binding homeowners insurance quote, many insurers require you to undergo a 4-point inspection of your home.
What Is a 4-Point Inspection?
A 4-point home inspection is a review of the current state of your home. It’s called a 4-point inspection because it takes a look at four core components present in most homes–electrical, plumbing, roof, and HVAC.
Most insurance companies require your home to undergo a 4-point inspection before you can become eligible for home insurance coverage. The inspection essentially serves as an unbiased opinion of your home’s condition to help a prospective insurer understand the risks of insuring your home.
Things like leaky plumbing or shoddy electrical work could be a liability in the future, so a 4-point inspection can highlight these and other potential problems to your prospective insurer.
What Does a 4-Point Inspection Cover?
A 4-point inspection covers the main components found in most homes.
- Electrical system: Electrical panels and electrical wiring.
- Plumbing system: Existing water damage and hot water heaters.
- Roofing: Roof shingles and roof covering.
- HVAC system: Heating, ventilation, and air conditioning parts.
A home inspector in charge of the 4-point inspection will examine these 4 points to look for current or future problems. The report will have pictures of your home’s interior, exterior, and each component listed in the 4-point inspection.
A home inspector may also note the age, condition, material used, and general type for each system. Insurance underwriters just want to know if your home has any potential for increased risks in the future from these four components in your home.
Home Inspection Vs. Buyer’s Inspection Vs. 4-Point Inspection
Home or buyer’s inspections are not the same as a 4-point inspection. A full home or buyer’s inspection includes a lot more detail which you will want to know before purchasing your home.
Some critical areas of interest analyzed in a home or buyer’s inspection include:
- Doors and windows
- Structural integrity
- Property conditions
- Electrical outlets
- Plumbing fixtures
- Toilet and sink condition
A home or buyer’s inspection is vital in helping you decide whether to buy a house. But your insurance company doesn’t care about the more minute details.
Insurance underwriters and insurance companies just want the information in a 4-point inspection to put together an insurance policy for your home.
Do All Homes Need a 4-Point Inspection?
Most modern and newer homes usually don’t need a 4-point inspection. But older homes face the risk of not meeting building codes or running into other hiccups, so a 4-point inspection may be mandatory.
Home inspection requirements also change depending on the state. To get homeowners insurance in Florida, for instance, you need to have a 4-point inspection done.
On the other hand, some insurance companies may make inspections mandatory before issuing an insurance policy, no matter the state. This is more prevalent in homes over a decade old.
What Happens If You Fail a 4-Point Inspection?
4-point inspections are relatively black and white. You can either pass or fail, with no room for other outcomes. If your home fails a 4-point inspection, it’s generally because the condition of one of the 4 points wasn’t in an acceptable state.
Some examples might include:
- The central heating and air conditioning system is missing or not functional
- The roof is damaged
- Aluminum wiring is present
- Polybutylene pipes are used in the plumbing
You basically have three options if your home happens to fail a 4-point inspection:
- Repair what is required before buying your home or undergoing another 4-point inspection.
- Look for an insurance company that doesn’t require a 4-point inspection for homeowners insurance.
- Appease your insurance company, ask them to accept a failed inspection, and give you a month or two to make the required repairs.
If you plan to negotiate repairs with the seller of a house before buying it, a building contractor can quote you for the repairs you’ll need.
And don’t forget, some insurance companies don’t even require a 4-point inspection. But if they do, you can try to get temporary coverage and make the repairs within a given timeframe.
Frequently Asked Questions
How much does a 4-point home inspection cost?
The cost of a 4-point home inspection can change based on the state and insurance company. Generally speaking, though, 4-point inspections fall somewhere between $50 and $150.
How do I schedule a 4-point inspection near me?
Your personal insurance agent may have their own list of recommendations for 4-point home inspectors. You could also look through the International Association of Certified Home Inspectors (InterNACHI®). It conveniently lists inspectors by their state and address.
What is the problem with Polybutylene pipes?
Polybutylene pipes are a problem because they become brittle after exposure to certain elements in the local water supply, therefore being more susceptible to leaking. This was only discovered and addressed in 1994 when the material was removed from the “acceptable plumbing” list.
Why is aluminum wiring in my home an issue?
Aluminum wiring isn’t problematic in itself. The problem lies within the outlets and connections. Homes with aluminum wiring are up to 55 times more likely to have “fire hazard conditions” than homes wired with copper, according to a report from The U.S. Consumer Product Safety Commission (CPSC). On top of that, faulty wires also account for nearly 90 percent of all residential fires.
The Bottom Line
Before you buy your home, make sure it is eligible for homeowners insurance by passing a 4-point inspection. Arrangements can be made with the seller to negotiate repairs before you purchase the home.
In the event that you already own the home, you will need to cover the cost of repairs yourself in order to pass a 4-point inspection, so your other best option is to look for an insurance company that doesn’t require a 4-point inspection at all.
Looking to read more about homes and getting homeowners coverage? Read our Blog Article about How to Estimate the Replacement Cost of your Home.