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hack of all trades
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Discussion Starter · #1 ·
I just got a call from my insurance company to schedule an inspection for my coverage. I've had the house for a few months and bought the insurance last month. I currently have one back room down to the studs, my bedroom only has an old board subfloor, and I just resheathed the back exterior wall of the house. The block foundation has areas that need tuckpointing... the furnace is from 1977. Does anyone know how screwed I am? I assume they will just drop my coverage. I'm hoping there's a chance they will accept that I'm making some improvements. I have a few fire extinguishers mounted, working smoke alarms, and will try to clean up and make sure there are no obvious hazards. This inspection is tomorrow at 1 pm. The guy originally suggested he come today! :eek:
 

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The home inspections we do here for insurance purposes are twofold.

1) Hurricane Mitigation Inspection. This is to certify the protection of the windows, how the roof is attached, how the wall to truss attachments are..etc..not a big deal and does not apply to you.


2) This is a basic 4 point inspection. Not a pre-buyer home sale inspection. This is to certify the basics..ala 4 points...structure,electric,plumbing and heating/HVAC.

This is a very basic inspection..they look for common issues in all 4 areas..for instance..aluminum wiring in the electric sysytem, lead pipes or recalled PVC piping, lead paint or the possibility of it, the age of all components of the heating/HVAC.

To be in a state of repair or remodel should have no bearing on the insurance policy. Unless you are undergoing major renovation to electric, plumbing, structural without proper permitting perhaps.

They are there to make sure you are not living in shack with substandard everything before they insure it for the minimum owed on a mortgage for said shack.

I hope this helps and I am using my experience as a CBC in Florida to offer advice.
 

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hack of all trades
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Discussion Starter · #3 ·
Thanks. That makes me feel a little better. Most of the repairs that are in the process are surface replacement, carpet and fiberboard stripped from the walls etc.
 

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Capra Aegagrus
Remodeler
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Better make sure your roof is looking clean also:jester:
Too true. We recently took out a new policy (long story), and 3 months later after someone stopped by to look at the house, they cancelled and refunded most of the premium. The three major things noted were moss on the roof (a very tiny amount, actually), a back door that hadn't been painted in some time, and construction going on.

The "construction" was a rebuild of a damaged area that was hit by a falling tree. Exterior was 100% done, drywall was up and painted, but kitchen cabinets hadn't been installed yet.
 

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Too true. We recently took out a new policy (long story), and 3 months later after someone stopped by to look at the house, they cancelled and refunded most of the premium. The three major things noted were moss on the roof (a very tiny amount, actually), a back door that hadn't been painted in some time, and construction going on.

The "construction" was a rebuild of a damaged area that was hit by a falling tree. Exterior was 100% done, drywall was up and painted, but kitchen cabinets hadn't been installed yet.
That's ridiculous. :rolleyes:
 

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One of the flips we had was in real bad shape, and after the inspector drove by , they forced me to change the coverage to a vacant structure coverage. After I changed the windows my agent told me to put shades or sheets on the windows, to make it look lived in. Another inspection was done and my coverage went back to normal.... The coverage for a vacant structure was more expensive than the standard policy.
 

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Capra Aegagrus
Remodeler
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That's ridiculous. :rolleyes:
You want ridiculous? Let your HO insurance lapse for whatever reason, then apply for a new policy. Doesn't matter what company you go to, your premium will be 2-3 times what you were paying previously.

When you ask why so high, the answer is "Because you let it lapse."

I kid you not.
 

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Renaissance Man
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You want ridiculous? Let your HO insurance lapse for whatever reason, then apply for a new policy. Doesn't matter what company you go to, your premium will be 2-3 times what you were paying previously.

When you ask why so high, the answer is "Because you let it lapse."

I kid you not.
Sell it to you wife for a buck and have her call to institute a new policy :jester:

Personally I believe these internal inspections are triggered by many things,...e.g. new construction permits, credit reports, drive-by inspections, new purchases/change of ownership, insurers looking to pull out of "risky/high claim areas, etc...

If the home shows deficiencies, lack of maintenance or perceived hazards on the exterior, they simply assume the interior is much the same.

Aren't you the one who posted how to fix the siding around those down sized windows? A drive by inspection "may" have be the culprit here as they may be concerned with water infiltration and such. Then again, you just bought the house so I would assume that entitles them to an inspection.

Should be in the fine print of your policy if you look close. Around these parts it is common for exterior inspections but it usually doesn't go much further than that except for when the policy is instituted.

Disclaimer...I could be absolutely wrong in my assumptions as that's all this is ;)
 

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hack of all trades
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Discussion Starter · #10 ·
Yeah I did patch siding over one window and it looks okay. Since we moved in a month ago the place looks 100x better, but that's not saying much. For the past 11 years a family lived here and let the vines basically consume the house. Place is still pretty rough all around. Keeping my fingers crossed...
 

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simple answer is don't let them in the house. According to my insurance agent, You don't have to let them in, they will just make assumptions about what the house contains as far as finishes, flooring, etc. as all they are trying to do is figure out what to insure the house for in case of a total loss.
 

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hack of all trades
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Discussion Starter · #12 ·
The inspector came and didn't seem concerned about anything. He didn't "inspect" very thoroughly and seemed to be most interested in confirming type of siding, walls, breaker box etc. That being said, maybe he just walked in and said "this is a definite fail!" and breezed through with no bother.
 

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Repair/Remodeling Tech.
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simple answer is don't let them in the house. According to my insurance agent, You don't have to let them in, they will just make assumptions about what the house contains as far as finishes, flooring, etc. as all they are trying to do is figure out what to insure the house for in case of a total loss.
I would check with my own agent before doing that :)

Depending on what the policy says, not letting them in could be reason to cancel the policy (or not issue a policy)
 

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Repair/Remodeling Tech.
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The inspector came and didn't seem concerned about anything. He didn't "inspect" very thoroughly and seemed to be most interested in confirming type of siding, walls, breaker box etc. That being said, maybe he just walked in and said "this is a definite fail!" and breezed through with no bother.
Naaa, sounds like you got it made to me. If he was going to fail it, I would hope he would at least tell you that.
 

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The insurance company is not obligated to sell insurance to anyone and they can make their own decisions regarding the coverage/rates. There is always another insurance company.
 

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General Contractor
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I just got a call from my insurance company to schedule an inspection for my coverage. I've had the house for a few months and bought the insurance last month. I currently have one back room down to the studs, my bedroom only has an old board subfloor, and I just resheathed the back exterior wall of the house. The block foundation has areas that need tuckpointing... the furnace is from 1977. Does anyone know how screwed I am? I assume they will just drop my coverage. I'm hoping there's a chance they will accept that I'm making some improvements. I have a few fire extinguishers mounted, working smoke alarms, and will try to clean up and make sure there are no obvious hazards. This inspection is tomorrow at 1 pm. The guy originally suggested he come today! :eek:
Some will ask if you have permit, if you don't you might have issues. They getting strict right now after all the money they been paying out and looking for any reason to hike up the premiums.
 

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General Contractor
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You want ridiculous? Let your HO insurance lapse for whatever reason, then apply for a new policy. Doesn't matter what company you go to, your premium will be 2-3 times what you were paying previously.

When you ask why so high, the answer is "Because you let it lapse."

I kid you not.
Couldn't agree more with you... I just looked at one house to purchase, was gonna add a second floor and flip it...The house is on the slab and listing agent told my wife who is a Realtor also, this area is listed now in a flood zone since they remapped the flood zone area. My brother's house is right around the corner and that area was never flooded, but for some reason it became part of it. There is no river's near by, a few small brooks, used mainly for storm drainage.
I call my insurance and ask them to run that address in the database to see what is the insurance rate being in a flood zone... My Jaw dropped when I heard the price, 12k a year.
Now this information has to be disclosed by the Realtor, I like to see the sellers try to sell this house now :no:
 

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I know it is too late now as the inspection is done, but I thought I would add this:

Homeowner insurance policies differ from insurer to insurer, so you would actually have to read your insurance contract to find out exactly how the clauses are written.

Generally speaking though, there is usually a clause that states you must advise the insurance company "as soon as possible" of any changes that would be considered a "material change in risk". In other words, have you told the insurance company everything that might affect their decision to insure or not insure you; and would this different information affect what premium they would have charged for the insurance?

While "under construction" is something that you are supposed to notify them of, the definition (and again you'll have to check your specific policy wording) is often written like this:

For alterations or repairs to existing dwelling buildings or detached private structures:
The period of time during any alterations or repairs involving;
a) site preparation;
b) demolition;
c) laying of foundations;
d) removal or weakening of any structural support; or
e) the opening of an exterior wall or roof component that extends beyond 48 consecutive hours.
From your description of the repair work you were undertaking, it looks like you are okay.

....I currently have one back room down to the studs, my bedroom only has an old board subfloor...
Okay as this is not structural; studs and subfloor are still there.

....and I just resheathed the back exterior wall of the house.
Still okay. Even though this is exterior work, it was already done when the inspector would have shown up. If anyone asks, then hopefully you can tell them it was completed in less than 48 hours *wink, wink*

...The block foundation has areas that need tuckpointing...
They might notice this and the worst that might happen is they will likely give you a deadline by when this needs to be repaired.

... the furnace is from 1977.
No biggie if the furnace looks like it has been well maintained over the years. Even then, the worst that might happen is that they will require a HVAC contractor to approve it or repair/replace it before the heating season begins.


P.S. - If they do re-rate your policy and charge you more premium because you currently have unfinished repair work, make sure to have them re-inspect as soon as you have completed renos, so that the premium can then reduced back to the original charge.
 

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One more comment:

Did you know that often the reason for the inspection is not because of you but because of the insurance broker/agent?

The insurance company is likely auditing how the agent is presenting risks to them. Some agents don't use the rating categories that they really should be, so that they can quote a lower premium than another agent and thereby get the policy. For example, they say a home is solid brick when it is only brick veneer. Or they'll skimp on the square footage.

The inspector is looking to calculate a Rebuilding Cost (different from real estate value), and agents often submit a lower Rebuilding Cost instead of the true estimated cost; again so that they can under-quote and get the policy. Homeowners policies require you to insure to at least 80%, 90% or even 100% of the Rebuilding Cost. If the inspector comes up with a higher Rebuilding Cost than what the agent did (because he skewed the formula for calculating R/C), then the insurance company will probably change your policy, apply the higher limit of insurance and charge you extra premium.

The positive of this, if it does happen, is that you will then be properly insured. The last thing you would want is if your house burned to the ground and it cost $150,000 to rebuild, that you find out you only had $100,000 in insurance. Even with a partial loss, if you only had 2/3 the insurance that you should have, even a small claim will only be paid 2/3 and you will be on the hook for the remaining 1/3.

Many homeowners policies have a clause called Guaranteed Rebuilding Cost. If you insure to the limit they tell you (i.e. what the inspector says the Rebuilding Cost is), then if the inspector is wrong in his calculation and your burned-to-the-ground home costs $170,000 to rebuild, the insurance company guarantees to rebuild you a comparable home at the higher cost even if you only had $150,000 limit.

It is a good idea to check with your personal insurance agent to see that you have the Guaranteed Rebuilding Cost clause.
 
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