How to Get Homeowners Insurance Without an InspectionHomeowners insurance is an important responsibility of owning a home and in most cases, it is a requirement in order to get a mortgage. However, are you required to get an inspection done in order to get homeowners insurance? Typically yes, but there are some exceptions.
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Most homeowners would agree that homeowners insurance is critical. Weather events, fire, and a long list of other potential risks can result in tens of thousands of dollars worth of damage. Homeowners can even lose their homes altogether due to a catastrophic event. Also, mortgage companies require that you purchase homeowners insurance.
Many insurers require a 4-point home inspection before they will provide home insurance coverage. There are a few exceptions, but in general, if you need to take out a home insurance policy, your home will be subject to inspection.
Do You Have to Have a Home Inspection to Get Insurance?
There are no laws or industry-wide rules that require insurers to conduct home inspections. In some cases, insurance companies don't require inspections. Each homeowners insurance company has a unique set of requirements.
An insurer might feel comfortable issuing a policy in the absence of an inspection if there isn't a significant risk of catastrophic weather and if the builder included fire prevention precautions. For example, you may not need an inspection if the insurance provider determines that your recently built home isn't high risk.
There are a few scenarios that are more likely to result in a home insurance company requiring an inspection:
When the house is older than 25 years
If the home hasn't been inspected recently
If the house sits in a flood plain or other area prone to natural disasters
When the house has been rebuilt after a fire or other
Can You Use an Appraisal to Qualify for Homeowners Insurance?
Occasionally, an insurance company will accept a home appraisal instead of sending out an inspector. The rationale is that an appraisal is a type of home inspection, but often, appraisals are not as thorough or targeted. Still, if you've had a detailed appraisal conducted recently, it's worth asking.
What Is a 4-Point Home Inspection?
The inspection results help insurance adjusters decide on policy limits and insurance premiums. An insurance company could cancel a policy if the inspection findings reveal too much risk for damage or loss.
The 4-point inspection helps the inspector spot outdated systems and faulty construction completed when the home was built or improved. This is especially true when it comes to fire and flooding and your home's plumbing and electrical systems. An insurer may deem your risk higher if your home doesn't have updated systems.
This inspection is different from the in-depth inspection you might request when you're buying a new home. However, some home insurance companies will accept the results from your home buying inspection if you recently purchased your property.
Most insurers who do require an inspection ask for a 4-point inspection covering these key categories: roof condition, plumbing, HVAC, and electrical.
Homeowners file wind and hail damage claims against their insurance policies more frequently than any other claim. A home's roof is the most vulnerable part of the home for this kind of damage. Roof replacement is also costly.
Home insurance companies want to document the age and condition of your roof before they issue the policy. This will give adjusters a baseline against which they can compare any new damage down the line.
If you're worried about getting approved from homeowners insurance with a bad roof, read our article covering How To Get Homeowners Insurance With a Bad Roof for tips on fixing your roof, and shopping around for the best coverage.
Heating, Ventilation & Air Conditioning (HVAC) System
Inspectors check out the age and condition of a home's HVAC system to determine if there's an elevated risk because of imminent mechanical failure. Inspectors look for signs like leaking, reduced efficiency, and deteriorating physical condition — all issues that make it more likely the units may malfunction in ways that damage the property.
The inspector will examine the condition of your plumbing, including drain and supply lines. Issues like leakage, an older water heater, or outdated pipes can raise rates. Flooding is a common source of homeowners insurance claims.
When the electrical systems installed in an older home haven't been updated for many years, or at all, there is a heightened risk of fire because a malfunction or electrical failure is more likely. For example, the extremely outdated knob-and-tube wiring that was popular in the 1940s is much more dangerous than today's updated wiring methods.
Your inspector will look over electric panels and take note of the system's overall condition. Your rate will likely be higher if you haven't updated your home with ground-fault circuit interrupter (GFCI) plugs or if you or a previous owner have only partially updated the system.
How Can You Prepare for the Inspection?
Before the inspection, do a mini walkthrough. If you are moving into a new home, you'll need to get permission from the current homeowner.
Check out each of the four places the inspector will examine. Even if you don't have a professional background in these areas, you'll be able to spot visible areas for concern.
Fix any issues you spot, if you have time and the repairs aren't too expensive.
What if Your Home Fails the 4-Point inspection?
In many cases, your home might pass the inspection, but the adjuster may ratchet up your rates to reflect the insurance risk of your home. Or, your home may fail the inspection altogether. In either case, you can work to fix the damage and try again.
Another possibility is that the insurance agency will agree to write the policy, but only if you agree to perform certain repairs within a limited time frame. Frequent repairs and updates homeowners insurance companies require include:
Trimming trees back, so fewer branches are hanging over the roof
Repairing or replacing older roofs
Updating aluminum wiring with copper wiring
Replacing an older water heater
Fixing leaks throughout the home
Once you've made the repairs, the insurance company may conduct a follow-up inspection to verify you've made the repairs as agreed.
Are There Alternative Options for Insuring a Home?
Some homes are essentially uninsurable by a standard insurance policy. In these cases, you'll need to seek out an alternative option to insure your home.
For example, in a historic home, it can be prohibitively costly to bring all the plumbing and electrical up to code that may not qualify for a standard policy.
Another unusual circumstance is when a home also serves as a business. You may need a mix of commercial and personal property insurance, but not all homeowners insurance companies offer both.
High-Risk Insurance Companies
In these cases, you can seek out insurance companies that specialize in high-risk properties and atypical situations. You'll likely pay more for this coverage than you would have for a standard policy. However, you'll still have the peace of mind of being insured. If you have a mortgage, your lender will likely require an insurance policy to be in place, as well.
If an insurer cannot extend a policy, they may have suggestions for finding homeowners insurance for high-risk properties.
Excess and Surplus Market Policies
You could also try the "excess and surplus" market, where you can find homeowners insurance provided by companies that are not licensed by the state. These insurers are not admitted careers — that is, the state's insurance department does not financially back their policies. Since these insurers are not bound by the same regulations and limitations as admitted carriers, they can assume more risks and take on atypical risks.
You'll find excess and surplus market policies in much the same way you'll find other insurance options. Start with a reputable third-party site that can connect you with a variety of possible solutions.
You can also consult the Insurance Information Institute's list of the top 25 surplus markets.
Fair Access to Insurance Requirements (FAIR) Plans
Finally, you could seek out insurance through your state's FAIR plan. These policies are more expensive but do provide a legitimate source of insurance when you are unable to access insurance through the private market.
Homeowners who live in geographic locations prone to catastrophic weather events often buy insurance through a FAIR plan because insurance companies are unwilling to take on the added risk.
If you get to the point where a FAIR plan seems like your only option, you may want to reach out to your State Insurance Commissioner's office for advice. These agencies should have access to all the available options for insurance in your state.
When You Need Homeowners Insurance, Don't Rush
Buying any kind of insurance can feel overwhelming, but it's a good idea to take your time and explore all your options. All too often, people go with the first plan they see. This can be a costly mistake that will be difficult to change later.
Not all homeowners insurance plans are the same, so spend time learning about what to look for in a policy. You'll be able to compare rates with more confidence.
Going through the process of insurance inspections can be a hassle, but many companies require it. If you prepare ahead of time, you won't be as likely to discover unpleasant surprises. Even if the inspector finds areas you need to fix, it could be an excellent opportunity to prioritize essential home repairs. Your home will be more insurable, and you'll gain the peace of mind of knowing your property is in good shape.