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Hi, I’m Joel Curran coming to you from the Gainesville, Florida offices of Tower Hill
Insurance Group. In this session, we will answer the question,
“What is a 4-point inspection, and why do I need to get
one?” With me today is Tim Treweek, President of
the Duke Agency, an independent agency here in Florida.
And Michael Rowan, CEO and President of Inspection Depot.
Inspection Depot is one of the leading providers of inspection services to the insurance industry
in Florida.
When you are buying a home, many different professionals get involved in checking your
home for a variety of reasons.
A real estate appraisal, pest inspection, recondition home inspection and title search
are just some of the different inspections.
One kind of inspection that is not familiar to most people is called a 4-point inspection.
This is generally required by an insurance company when asked to insure a home over a
certain age – generally 25 to 30 years and older.
Michael, can you tell us what the 4 points are?
Yes of course. The 4 points of a 4-point inspection include
the roof system, the electrical system, the plumbing system
and the HVAC system. A failure in any one of those systems (nearing
the end of their functional life or at the end of their
functional life) could have catastrophic events from a fire or could be a small minor leak.
Tim, what kind of questions to you get your customers regarding 4-point inspections?
Well Joel many of our new customers are also in the process of buying a new home so in
addition to buying the insurance policy they want to know
what documentation they’ll need in order to make that
happen. Many insurance companies will require for
older homes the 4-point inspection. So we explain that process to them and what’s
involved and what they need to do so that we can get
the application to the company and approved on their behalf.
Michael, what’s involved in these inspections from your standpoint?
Let’s first talk about the credentials or licensing of the inspector.
At Inspection Depot, all of our inspectors are either licensed contractors, engineers,
architects, home inspectors and all are trained specifically
for each inspection type – this being a 4-point inspection.
So the 4 point training is important for the inspectors that are doing it for us.
There are specific requirements that we need to cover to make sure they understand what
they are actually going to inspect when they get there
for a 4 point. When a customer calls our office, we schedule
an appointment at their time and convenience. Depending of course on the renewal date for
their policy that may make it a rush order if they’ve left it
until last minute which is not uncommon. Then the basic goal of the 4 point is to assess
the condition of all the major components of the 4-point
and determine if they’re installed correctly, permitted and estimate the remaining functional
life, if possible, of all components concerned.
Let’s look at an example of the roof system. This is normally the first part the inspector
will go to in order to conduct the 4-point. He’ll look at the roof and take some pictures.
He’ll identify the roof covering, the roof structure, the roof slope.
He’ll be looking for conditions such as missing roof shingles, defects, patched repairs.
He’ll also look for evidence of leakage, or sometimes premature aging and aging materials
that the customer is not often aware of that can cause
leakage. And of course we’ll look for any evidence
of leakage during the inspection as well. Good, so that’s the roof.
What about the other three areas of concern. Let’s look at the plumbing system first.
The inspector will assess and document the various components that are accessible for
the plumbing system.
He’ll take photographs of the water heater, the plumbing system underneath each of the
sinks and the washing machine connections and hoses.
He’ll also determine the type of plumbing system involved.
He’ll look for evidence of leakage, missing components, and particularly with older homes,
he’ll look at the plumbing system for rusting along the
pipelines which is an indication of failure or near failure.
He’ll also determine the type of piping involved.
Piping varies in performance and age expectancies, and for example, many insurance carriers are
concerned with the use of polybutylene plumbing as a result because of its potential for premature
failure. What about the heating and cooling system?
We look at the heating system from a perspective of electrical supply and its capacity to heat
and cool the house.
We will take photographs of the inside unit if it’s been updated and the outside unit.
And as part of that, we look at the electrical system and again assess the various visible
and accessible components.
The inspector will determine the amperage of the home.
He’ll take pictures of the open electrical panel, looking at the wiring components, the
wiring type of the home.
He’ll look for evidence of any special hazards that are visible.
If possible, they’ll look at the grounding system.
And also, particularly with older homes, they’ll look at the electrical system in comparison
to the use of the home.
Some of these older homes that still have the original occupants, now retired grandparents,
don’t use the home like younger homeowners who have
kids that use entertainment, Xboxes, and anything else
you can think of. The demand on that home if the electricity
is not updated is much higher than the demand on the older
home with the original owner. Do you find situations where repairs are needed?
Yes, quite often and it’s amazing that most of our customers don’t actually realize
that they have repairs that need to be done until our inspection.
As a matter of fact, many are very appreciative of the fact that we find repairs.
They are better served, I guess, in the sense that they and their family feel safer because
they took care of the repair beforehand instead of the problem
to occur down the line. Tim, how receptive are customers when they’re
asked to get a 4-point inspection? Well Joel once we explain why we need the
inspection, most customers will understand that it is part of
the underwriting requirements and we’ll then go ahead and provide them with the name
of a qualified inspector that they can call.
Inspection Depot perhaps. And the inspection normally costs approximately
$90-$125 depending on the part of the state that
they’re in. And most customers have no trouble in getting
that promptly which we advise them to do because it is
part of the underwriting process. The underwriting many times cannot proceed
until the inspection has been obtained. Ok, you get the inspection, then what?
Well once the customer gets the inspection to us, we will submit it to the insurance
company underwriter along with the full application.
They’ll take a look at that inspection, and if the inspection doesn’t indicate that
there are any repairs that are needed and that all the 4 points
are in good working order, up to code and have been properly
maintained, no problem. If the inspection shows that there are some
repairs that are needed, as Michael indicated is often the
case, then the underwriter may ask that that be addressed before the insurance company
will put coverage in place, or within a short period
of time after the coverage has been put in place.
4-point inspections are also necessary for those homeowners who are looking to replace
their current homeowner’s policy with a new company.
Sometimes our applicants will ask if they can just send in receipts showing that updates
were completed, or whether they can use a 4-point
done some years ago. At Tower Hill we do allow prior inspections
up to a year old, but receipts rarely cover all 4 points.
These inspections provide valuable information to the homeowners.
Taking preventative actions like replacing an aged roof before it leaks, or updating
older electrical or plumbing systems can help you avoid the inconveniences
of small damages, or worse, the heartbreak of
a significant loss. In this case, the old saying is right. An
ounce of prevention is worth a pound of cure.