Insurance companies in Florida recorded a record $5 billion in damage claims after Hurricane Irma last year. These large losses and those of previous years have had an effect on Florida insurance company underwriting standards.
What does this mean to you as a homeowner?
To mitigate losses, the state’s largest insurers require Florida homeowners, at their own expense, provide a 4 point inspection signed by certain qualified professionals such as a licensed engineer, electrician, roofing contractor or general contractor. You may select any qualified inspector in the state for this service.
We asked Orlando, FL experts at FSG Inspections to help us find everything you need to know about your Florida 4 point inspection.
Why Is a 4 point Inspection Needed?
Insurance companies in Florida encourage homeowners to make their homes safer and reduce claims. The state’s largest insurance companies now request a 4 point inspection before underwriting any policy and require the inspection for older homes.
Insurance companies are reluctant to issue insurance for older homes likely to generate claims or homes in poor repair. For instance, a home with a 25-year-old electrical panel may have a failure that causes an owner to seek damage reimbursement from the insurance company.
Similar concerns extend to the condition of the roof, HVAC, and plumbing systems in a home. If these elements are in incorrectly installed, in poor repair or in need of update or replacement, they are prone to failure. They represent the most common and costly sources of damage to a home.
What are the 4 Points?
The points are plumbing, electric, HVAC, and roof. The 4 point inspection is not a pass/fail test. It is informational in nature and gives the insurance underwriter an independent assessment of the age, condition and life expectancy of the major systems of the house.
An insurer will use the report to determine if the home meets their underwriting requirements. Some insurers have a special proprietary form they want filled out, other insurers will accept a standard report by the inspector. However, do not be tempted to use a real estate pre-purchase inspection report.
As noted by FSG Inspections,
“A 4-Point Inspection is far less in scope than a standard Pre-Purchase Home Inspection and does not take the place of a Pre-Purchase Home Inspection when a customer is considering the purchase a home.”
In other words, the two reports are similar, but not interchangeable. The insurance companies do not want large, detailed reports that contain other information an inspector might give in a Pre-Purchase Inspection. They want only specific information about the HVAC, plumbing, electrical system and roof in a short one or two page signed document.
Conversely, the short form of a 4 point inspection report is not going to give you enough detail to make an informed purchase negotiation and decision.
Your inspection report will note only the visible components of the system. If pipes are buried or inside walls, the inspector cannot access them. The inspector will note the condition of the main supply lines, main waste lines and vents, fixture supply lines and vents and fixture drain lines.
The age and condition of your water heater and any modifications to the original plumbing are also noted.
Again, this is a purely visual inspection. Your inspector will look at the age and condition of the service entry to your home (where the utility attaches), the capacity, age and condition of your panel, any visible outlets, switches or wiring and make notes of any modifications or updates made to the original wiring.
If there are any serious safety violations of the current electrical code, they will be noted. Your insurance company may require corrections before underwriting.
The type, size, and condition of the system will be noted, as well as the estimated lifespan remaining. Any significant concerns with installation, maintenance or repair will be reported.
The roof inspection will note the shape and angle of your roof, type of roof covering and approximate age of the materials. It will note your sheathing type, connectors and any evidence of past or current leaks. If there is more than one layer of roofing material or any defects in installation it will be recorded.
Most importantly, the estimated remaining lifespan of the roof will be reported.
What About Wind Mitigation?
Florida Statute 627.0629 requires all insurance companies to offer Florida homeowners policyholders “discounts, credits, or other rate differentials…” for specific construction that helps reduce wind damage caused by hurricanes, tropical storms, and other windstorms.
Ask your insurance agent if providing a Wind Mitigation Inspection report is in your favor. No insurance companies require a Wind Mitigation Inspection before underwriting a homeowner’s policy.
It is generally less expensive to order the two reports at the same time, as one inspector can fill out both forms while inspecting the related systems.
How To Find an Inspector
Florida insurance firms are concerned that conditions in older homes may be a liability for them. A 4 point inspection is becoming increasingly common as a requirement for underwriting in all but the newest homes.
As a homeowner, you may select any inspector you wish, as long as the person signing off on the report is licensed and qualified. Only the following Florida-licensed individuals may complete a 4 point inspection:
- Building Code Inspector
- Building Code Official — authorized by the State of Florida to verify building code compliance
- Registered Architect
- Home Inspector
- Professional Engineer
- Trade-specific, Licensed Professional — can sign off only on their trade component of the 4-Point inspection form (ex. a roofing contractor may not sign off on the HVAC portion of the form)
There are several professional directories listing Florida individuals holding multiple or single qualifications. Referrals from your real estate professional, attorney or insurance agent are excellent and trustworthy, as they may have a preferred inspection team. Orlando, FL locals can contact FSG Inspections or their local Sebule classifieds.
Are you an inspector, general contractor, roofer, plumber or electrician looking to reach more clients? Contact us with questions or post your ad for free on Sebule classifieds to ensure you get the customers you deserve.