When your home insurance company knocks at your door

If you’ve bought a home recently, you hopefully know the whole story of your home. If the home inspector has done their job right, you should have a clear picture of what shape the building is in and be aware of any renovations and repairs you may need to undertake in the months and years ahead.

That’s why you also shouldn’t be surprised if your insurance company wants to pay a visit after you move in and even after getting home insurance.

What’s your home insurance company looking for?

Home insurance protects homeowners from a myriad of risks — theft, storms, fire, and injury claims. In order to best anticipate those risks, insurance providers rely on an accurate assessment of the condition of the property before they draw up the home insurance policy.

In some cases, the homeowner only needs to verbally provide the information needed. However, depending on the home's age and location, home insurance companies may require a certified inspector to verify the property's condition.

If your home insurance company decides to send someone out, a few things they may be looking at might include your home’s:

  • Electrical system

Some types of wiring pose a higher risk of an electrical fire, especially after many years of use. Everyone is familiar with the risks associated with knob and tube wiring, but a home inspector may be eyeing a 60-amp electrical service with suspicion, too.

  • Plumbing

Older pipes are at higher risk of cracks, ruptures or leaks. Homes built prior to 1950 in particular often have galvanized steel pipes, which are estimated to have a life expectancy of just 40 to 50 years. If the plumbing hasn’t been replaced, then the insurance company will need to know this information in order to properly assess the risk.

  • Oil tank

Oil tanks can cause major environmental damage if they leak, and the clean-up costs can be huge (upwards of $15,000). If you have an oil tank, expect a lot of questions about its age and condition.

  • Wood-burning stove

If your home has a wood-burning stove, the home insurance company may want to confirm that it is installed and used properly. In addition, they may call in a certified technician to inspect it.

  • Roof

If your roof is old or has broken shingles and is in need of replacing, it could sustain considerable damage during a storm.

  • Potential for liability claims

A home insurance policy typically includes liability coverage in case someone is injured while on your property. A home insurance inspector will look for anything that raises a red flag. Two prime examples would be stairs in the home, as well as pools. The home inspector will be checking to see that there are handrails on the stairs and that the pool is properly fenced in.

  • Replacement value

One thing insurance providers want to know is the replacement cost of a home. They often use home inspections to figure that out. This is different from determining the value of your home, because it factors in the cost of labour and materials to rebuild, as well as any possessions that you brought into the home after you moved in.

If the home inspector determines that your home’s replacement value needs to be increased, your home insurance premiums will likely increase too.

Related: 3 ways to value your home renovations

Your home insurance inspector has come a knockin’. Do you have to let them in?

Probably. The fine print on home insurance policies usually gives home insurance companies the right to examine a property they have been asked to cover. And if you don’t allow them access, then they can opt not to provide you with the coverage you’re seeking. That said, a home insurance company will not show up, or send somebody, unannounced.

They will notify you in advance of a home inspection and set up a mutually agreed upon time. If someone comes to your house unannounced, saying they’re from the insurance company, play it safe and don’t allow them in and contact your insurance company immediately.

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