INDUSTRY INSIGHT
INSURANCE
SPONSORED CONTENT
DOES A GOOD HOME INSPECTION
EQUAL INSURABILITY?
H
FOUR COMMON HOME INSURANCE ISSUES TO BE AWARE OF DURING YOUR INSPECTION
aving a home inspection is crucial to making sure that
your dream house won’t end up becoming a money pit.
Although home inspectors are experts at determining
if a structure is properly sound, they may not be aware
of certain factors that could affect a home’s eligibility for insurance
coverage even when it passed inspection. Although every company’s
underwriting guidelines are different, these are some common issues
that could prevent you from obtaining coverage and delay your
closing. Knob-and-tube wiring is an older type of wiring (pre-1940) that
is dangerous due to its fabric insulation that breaks off over time,
exposing the bare wire underneath. Many times knob-and-tube
wiring is left installed in a home but is no longer connected and
active. Your home inspector should be able to tell if that is the case.
If any electrical circuits are actively running on knob-and-tube,
home insurers will not be able to provide coverage. Once the home
is rewired and no knob-and-tube is active, then insurance can be
considered at that point.
Roof Condition
This is the most obvious of the external issues, but one that
insurance companies are extremely concerned with as it provides the
most potential for future water damage. An inspector can give you a
good idea of the age of your roof, and let you know if it is beyond its
useful service life. For most insurance companies, any asphalt shingle
roof older than 25 years will not qualify and will require a replacement
before coverage can be written. Other issues to be aware of are
missing shingles, poorly patched roof sections, and damaged and
missing gutters, as they could lead to a coverage decline as well. Older Furnaces
With the cost of installing a new furnace in a home, it’s not
uncommon for a homeowner to approach a “If it’s not broke, don’t fix
it” attitude to an older furnace that is still functioning well. However
when it comes to buying a home with an older furnace, even
though it may work well it may affect your eligibility for coverage.
Gas furnaces are only rated to run up to 25 years, and insurance
companies many times require that the furnace in the home be
updated within at least 30 years. If older, they may require that it be
replaced in order to be eligible for coverage.
So when you are looking at a house, remember to involve your
insurance agent in the process. Even invite him/her to come to the
home inspection. That way if there are any issues that may arise, they
can be dealt with early. That’s what we are here for at the Bill Flinn
Agency. If you are looking to purchase a home and need insurance
advice, call us first.
Missing Railings or Stairs
This is a commonly overlooked exterior issue. If you have a set of
stairs outside your house with three or more steps, there must be a
railing. Many older houses may have cement steps with no railing, or
a homeowner may have made a deck or landscaping area without a
permit leading to an external stairway with no handrail. Thankfully
this is an easier fix than installing a new roof, but it is just as important
an issue to resolve to ensure that your closing goes smoothly.
Missing handrails are one thing but some homes may be missing
the external stairs completely. This usually comes about from an
unfinished deck project or something similar. This can lead to a
door with a one-to two-story drop on the first step. Understandably,
this is a gigantic liability exposure for you as a homeowner, and an
insurance company will not insure a home with this kind of issue. It
may seem hard to believe, but I have seen this myself enough times
that it bears mentioning. If you see this on a house, be aware that it is
a surefire decline from almost all carriers and will need to be resolved.
Older Electrical Systems & Knob-and-Tube Wiring
Electrical systems are one of the most important internal issues
that need to be considered, as faulty and outdated wiring can lead
to catastrophic and life-threatening fires at any time. All insurance
companies want to see at the very minimum 100 amps service and
prefer all wiring to be on circuit breakers, as opposed to fuses. Some
companies will cover a home with fuses as long as the system meets
their standards. Some will not, so if you have fuses in your home it is
best to check with your insurer to see what the company’s stance is.
Most homes are
underinsure
by an average of 1
Do you have enough
Most homes are
coverage to rebuild?
underinsured
by an average of
Erie Insurance
100%
Guaranteed
Company A
$47,000
Underinsured
Do you have enough
coverage to rebuild?
Company A
$47,000
Underinsured
Erie Insurance
100%
Guaranteed
Company B
$51,000
Underinsured
19%
*
Company B
$51,000
Underinsured
Company C
$38,000
Underinsured
Bill Flinn Agency Inc
Bill Flinn Agency Inc
This Industry Insight was provided by the Bill Flinn Agency.
For the last 40 years the Bill Flinn Agency has been serving
the Bethel Park and South Hills communities. Since
opening our doors in 1972, our mission has been to treat
our customers by the golden rule. Learn more about us at
www.billinnagency.com, or stop by our oce on South Park
Road in the heart of Bethel.
2754
S Park
Rd
2754
S Park
Rd
Bethel Park, PA 15102-3858
Bethel Park, PA 15102-3858
www.billflinnagency.com
www.billflinnagency.com
412-833-5351
412-833-5351
*64% of homes are undervalued—and potentially underinsured—by 19%, according to Marshall & Swift/Boeckh, a
leading provider of building cost data to real estate professionals. **ErieSecure Home SM with Guaranteed Replacement
Cost requires home improvements over $5,000 to be reported within 90 days. Coverage of costs to comply
with laws or ordinances is subject to limits. Depreciation may be deducted until repair or replacement is made.
Visit www.eriesecurehome.com/details or talk to your ERIE Agent for more information. Not all companies are licensed to
operate in all states. Go to erieinsurance.com for company licensure and territory information. Equal opportunity insurer.
*64%
of homes are undervalued—and potentially underinsured—by 19%, according
S1420b 5/12
to Ma
leading provider of building cost data to real estate professionals. **ErieSecure Home SM with
Cost requires home improvements over $5,000 to be reported within 90 days. Coverage o
with laws or ordinances is subject to limits. Depreciation may be deducted until repair or re
BETHEL
❘ ERIE
SPRING
2019
13 information. No
Visit www.eriesecurehome.com/details
or PARK
talk to your
Agent
for more
operate in all states. Go to erieinsurance.com for company licensure and territory informati