Four-point inspection form explained - What insurance companies want to know
A four-point inspection form is a questionnaire which a lot of insurance companies use to get you the best insurance rate possible. Ask your insurance agent about their version of this form.
You generally hire a licensed home inspector or qualified and licensed Construction Professional who the insurance company deems fit to complete this form.
This inspection’s purpose is to save you money on your insurance by taking care of some basic building bits and pieces that make your house a safe home.
Real estate consultants and developers use this extensively. Have this information with you when you go on an inspection as follows:
The Insured (you or your company)
Risk Location: The property address
Policy #: (your property address policy number)
Policy dates: (from __ to ___)
Inspection Date:
Contractor name:
Contractor address:
Contractor phone #:
NEXT the MAJOR PARTS and SYSTEMS of the building are identified, with their age and condition.
1. ROOF: Does the Installation meet the 2006 International Residential Code? (This is subject to change as codes get revised)
What is the roof material? There will be a choice of:
Composition Shingles (a tar based shingle that looks like thick paper with a rough top laid one on another, (typical in most parts of the US). They have warranties from 15-30 years. Most insurance companies prefer the “architectural shingles” since they have a longer warranty.
Tile: This could be different colored tiles laid one on another. Now used a lot in hurricane prone areas such as Florida.
Metal: These come in a few designs and different thicknesses. They cost more than composition shingles, but if installed correctly they will last longer, even up to 50 years.
Tin: This lightweight metal material has a special quality that when you look at it too hard will fly off; it’s generally used on sheds and add-on’s in the US and extensively in developing countries.
Other: A possible combination of any of the above roof systems.
ESTIMATED AGE OF THE ROOF: This is a big deal. Why? When there is a storm and you lose your roof, the insurance company may depreciate the value of the roof before you get any money. Depreciation means they will pay you for what the roof should cost minus the age. That’s why the next question asks:
Estimated Life Expectancy? Why do they ask this? Because even a roof shingle that claims to have a warranty of 35 years is probably only good for a fraction of that depending on where in the world it is installed.
Are there any missing shingles? Missing shingles are a sure sign that either the wind blew them up or more likely they were not properly installed. The manufacturers have very specific, albeit simple directions, explaining how to install shingles. However, do you really think all roofers will do the right thing? Really? Then, go back to the “trust then verify” theory of life.
Any visible leaks or signs of deterioration? Check for any leaks around openings anywhere there are holes or penetrations in the roof or windows and doors. Sometimes around pipe penetrations, such as plumbing vents to the outside and/or dryer vents.
Condition of the roof? Choose from excellent to good to corrective action needed. No matter what a Seller or agent tells you, have a professional walk around on that roof. Only when you walk and touch it can you really evaluate the overall condition.
2. ELECTRICAL
Does the Installation meet 2006 or later International Residential Code? (This is subject to change as codes get revised).
Has the Electrical System been upgraded to Circuit Breakers? If so, when? This is a HUGE deal and often a deal breaker, (no pun intended). The problem with old fashioned breakers may also be a problem with the wiring.
As the homeowner all you need to know is if something isn’t grounded right, it could be a shocking experience for you. If you hear an electrician say “so and so isn’t grounded right,” get it fixed immediately!
The current code (2016) requires specific types of breakers for bedrooms and “wet” areas (bathrooms and kitchens). This is a safety requirement so you don’t get shocked. Look at it this way, “If it isn’t grounded you could end up in the ground, 6 feet under.”
Are there any active knob and tube or aluminum wires and cabling? Neither you nor the insurance company wants either of these.
Back in the olden golden days aluminum was commonly used within homes. A combination of oxidation and other issues could lead to a breakdown in how well the electricity flows through the wires. Older breaker boxes may also not be grounded correctly. Beyond that, some of the outlets in the home may not be grounded correctly or at all. (There are some simple tools you can get at a hardware store that look like a plug where you can check if an outlet is grounded or not). Your safest bet is to hire a professional to check them all.
Are there Fuse Boxes in the home? This goes back to the previous question. Fuses are a no-no and a giant red flag to other possible problems.
Estimated age of the system? This isn’t just to know the age, but more about the building code at the time of the installation.
Condition of the Electrical System? The insurance company understands no building is perfect. They are looking for red flags that could signify other big problems. You as an owner need to be aware of the details while staying ahead of the overall condition.
3. PLUMBING
Plumbing is basically 3 systems; water supply coming in, water and waste leaving and gas that comes in to heat air or water. Each system is independent of the other. The systems are controlled by gravity, and a series of valves and pipes to move the air, liquids and some solids in and out of a building. The materials are generally plastic, (PEX, PVC) and metal (copper) and in older buildings: steel, aluminum and clay.
Does the Installation meet 2006 International Residential Code? (This is subject to change as codes get revised). Plumbing codes don’t change as much as electrical. Plumbing changes usually revolve around means and methods to controlling or regulating the flow of the water supply for drinking and heating.
Most of plumbing typically follows the logic that water pressure determines sizing of piping, air pressure allows waste to leave and all water flows downhill.
Has the plumbing system been upgraded? Plumbing rules and regulations vary widely by state and local jurisdictions. These can affect you should you need to pull a permit for renovations or modifications.
Describe the plumbing? Choose from % PVC, % Copper, % Galvanized, % other. Buildings built or extensively renovated after 2008 will probably have PEX® and copper for the water supply lines and PVC or ABS plastic piping for the vent and waste lines.
Is there reduced water flow or rust in galvanized piping? Galvanized piping tends to attract minerals to itself like bugs are attracted to the light. In some areas of the country there are a lot of minerals in the water. As such, over a period of time two things happen: (1) The minerals attach themselves to the inside of the piping and slowly but surely constrict the flow of water into the home. (2) The minerals attach/marry to the galvanized pipe, but their relationship corrodes where the water meets air at joints along the way. Eventually the joints leak which leads to rust. Worse case, leaks occur on wood, and then wet wood leads to rot and termites.
What is the overall Condition of the Plumbing system? Your choices will be excellent/new, good/everything flows well to corrective action needed because of leaks of water supply coming in or water going out, or gas leaks that most commonly occur a the joints, (where there is a shut off valve).
One cannot get into every nook and cranny even with video inspections of sewer lines, but you can discoverthe tell tale signs of potential problems.
CENTRAL AIR CONDITIONING
Does the Installation meet 2006 International Residential Code? (This is subject to change as codes get revised with some areas requiring certain Energy Rating minimums).
Is Central Heat Installed? Central Heat comes in two flavors: A heat pump is a system where you have a pump with a fan outside the building (a condenser) and a big metal box inside that contains (1) A pump with (2) A fan that blows over a series of (3) metal heat strips and/or (4) A cooling coil, controlled by a computer board inside and a thermostat in the building. If the Central Heat is gas powered then the heating strips are a fire similar to an oven.
The heated or cooled air will be carried through a series of vents to each room.
What is the estimated age of the unit? Central air units tend to start failing 8-10 years after installation. Generally, what goes wrong are the capacitors on the outside condenser (looks like a small soda can), leaks in the freon lines or control boards in the blower portion of the inside unit.
Other sources of heat? Options are (1) Wood stove (2) Space heater (3) Water circulating or steam circulating systems.
In this list, space heaters can be the monster lurking in the cold shadows of winter if not properly used. The opportunity for fires is high and safety with children around them is a big consideration. Although space heaters may have automatic shutoffs when tipped over, they should only be supplemental heat in a building - not the only source of heat.
Condition of the heating unit? Is it excellent, good or is maintenance needed? The type of maintenance is generally: (1) The unit with the heating source needs to be cleaned of any / all debris making sure there is no rust around. (2) Make sure the shutoff valves at the heating unit are to current code and do not leak. Last but not least, make sure the filters on the inside unit are changed regularly and the ductwork is clean.
The last part of the form is the inspector’s signature, date of inspection and license number.
For you the owner or future owner, this one document is the foundation of how you will run your business of owning your home or investment property.
As you do your own inspections make sure and take a picture of and / or write down the serial and model numbers of the equipment. It will only take you a few minutes but will save you thousands of dollars if or when something happens. Having that documentation handy makes this four-point inspection more than simply a discount on your insurance bill.