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DOES A GOOD HOME INSPECTION EQUAL INSURABILITY ?
Four common home insurance issues to be aware of during your inspection
Having 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 whether 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 passes inspection . Although every company ’ s underwriting guidelines are different , below are some common issues that could prevent you from obtaining coverage and delay your closing .
t ROOF CONDITION
This is the most obvious of the external issues , but one that insurance companies are extremely concerned with since 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 , which could lead to a coverage decline as well .
t 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 concrete 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 . It can lead to a door with a one- to two-story drop . 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 . As odd as it sounds , I have seen this situation myself enough times that it bears mentioning . If you see this issue on a house , be aware that it is a surefire decline from almost all carriers and will need to be resolved .
t OLDER ELECTRICAL SYSTEMS & KNOB AND TUBE WIRING
Electrical systems are one of the most important internal issues that need to be considered . 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 amp 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 be certain .
Knob and tube wiring is an older type of wiring ( generally pre-1940 ) that can be dangerous due to its fabric insulation that breaks off over time , exposing the bare wire underneath . Many times , knob and tube wiring is left in a home but it 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 wiring , home insurers will not be able to provide coverage . Once the home is rewired , insurance can be considered at that point .
t OLDER FURNACES
With the cost of installing a new furnace , it ’ s not uncommon for a homeowner to have an “ 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 often 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 . Some buyers have even invited their agents to the home inspection appointment . That way , if there are any issues that arise , they can be dealt with early . If you are looking to purchase a home and have questions on the insurance side of things , give us a call at 412.833.5351 . We are here to help !
Most homes are underinsured
by an average of 19 % *
Do you have enough coverage to rebuild ?
Company A $ 47,000 Underinsured
Erie Insurance 100 % Guaranteed
Bill Flinn Agency Inc
2754 S Park Rd Bethel Park , PA 15102-3858 www . billflinnagency . com
412-833-5351
Company B $ 51,000 Underinsured
Company C $ 38,000 Underinsured
* 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 . S1420b 5 / 12
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