4-Point Inspection: What It Is & Why They Matter

A 4-point inspection checks the four main parts of a home: the roof, electrical system, plumbing, and HVAC (heating, cooling, and ventilation). Home insurance companies need this inspection to assess any major safety risks or potential insurance issues.

Unlike a full home inspection, a 4-point inspection only looks at these specific areas and doesn’t cover the whole house. Insurance companies often request a 4-point inspection on primary homes over 40 years or rental properties over 30 years old.

The Purpose of 4-Point Inspections

The 4-point home inspection checks a property’s roofing, electrical, plumbing, and HVAC systems to identify risks for insurance coverage. Insurance companies use this inspection to confirm the condition of these areas and reduce their claims risk.

These inspections are especially common in areas prone to natural disasters, like Florida, the Gulf Coast, and the East Coast. Insurance companies are cautious about covering older homes (over 20 years) due to their higher risks.

A ValuePenguin study revealed that most homeowners insurance claims occur from wind, nonweather water damage, hail, and weather-related water damage. These comprised 71% of all home insurance filings, with 61% of the priciest claims caused by those same four types of damages.

Many insurance companies are wary about providing coverage for homes over 20 years old as it increases their liability and risk tolerance.

Someone looking for coverage on an older home could experience roofing, plumbing, electrical, or HVAC problems soon. Homeowners with insurance usually want reimbursement for such issues, which would cost insurers more money over time.

Insurance underwriters use these inspections to gain insights into what financial risk they are taking when insuring that property.

Before potential homebuyers fully commit financially to a mortgage, they can use a full home inspection to determine the property’s condition. Any major issues within the home’s four major systems could indicate problems down the road that could lead to an insurance claim.

There is a debate between home inspectors and real estate agents about the necessity of certain repairs. Many items like old electrical systems are considered “grandfathered” and do not require updates according to state real estate laws.

However, insurance companies aren’t bound to honor grandfathered systems and may require updates to obtain home insurance. They’re just not willing to take the risk or make a claim.

Insurance agents often write your policy binder the week before closing. The home buyer often doesn’t realize they need repairs to get insurance until after closing and taking possession of the property.

What Does a 4-Point Inspection include?

A 4-point inspection covers the following areas of your home:

Roof Conditions

The inspector will check the roof’s age, condition, materials, and how it’s built. They’ll also look at the attic’s ventilation to see if your insurance can cover risks from an old or damaged roof.

Insurance companies usually don’t like insuring asphalt roofs over 15 years old and architectural shingle roofs over 20 years old. They want to avoid the cost of replacing roofs damaged by wind or water.

Roof inspections are very detailed. They check how the roof is laid out and designed, which is important for the house’s structure, energy use, and preventing mold. Inspectors look closely for any risks to the house or people inside.

They consider:

• Age: Roofs don’t last forever. Replacing them after 20 years is often recommended to avoid issues like broken or missing shingles.
• Condition: Old roofs can gather water, leading to serious damage. Inspectors look for any signs of trouble to keep your home safe.
• Leaks: Inspectors check for leaks, which can cause costly damage inside your home if not fixed.
• Shape: The roof’s shape is crucial, especially in areas with strong winds or heavy snow. Hip roofs are common because they offer good protection in harsh weather.

The Electrical System

The inspector must check the age and type of your home’s electrical wiring to spot potential safety risks, like fire hazards.

They ensure everything meets safety codes, outlets are properly grounded, and the electrical system fits your home’s size. Electrical panels last about 25 to 40 years before components wear out or become obsolete.

Insurance companies often won’t cover homes with Federal Pacific or Zinsco electrical panels because they’re known to increase fire risks. Other risky wiring types include knob-and-tube and other ungrounded wiring.

You might still pass the inspection if the issues aren’t too severe. But, if found, certain electrical parts can lead to a failed inspection because insurance companies won’t cover them.

Common electrical issues that could cause a failed inspection include:

• Knob-and-tube wiring
• Branch aluminum wiring
• Old fuse boxes
• Faulty or old breaker boxes (like those from Federal Pacific and Zinsco)
• Exposed wire connections
• Overloaded circuits (double-tapped breakers)
• Old cloth and sheath wiring
• Missing smoke detectors

The Plumbing System

During the insurance inspection, the inspector checks the quality of materials in your home’s plumbing, like pipes and drains, to prevent water damage from leaks or floods.

A licensed inspector examines your plumbing system, checking the condition and age of pipes for leaks. They also check the water heater to ensure it provides hot water properly.

It’s noted that polybutylene pipes, a type of plumbing known to fail, can cause major water damage in homes.

The HVAC System

HVAC (heating, ventilation, and air conditioning) systems help maintain a home’s comfort. Old or poorly installed HVAC systems can harm air quality and increase dust, possibly causing health issues.

During an inspection, a professional checks the HVAC system for:

1. Functionality: The inspector checks if the HVAC system works properly. This includes ensuring the heating and cooling unit is sized and functions correctly. Fireplaces, oil furnaces, and window air conditioners are not considered main heating and cooling systems because they can be unsafe and inefficient.
2. Condition and Age: The inspector also looks at the HVAC system’s condition and age. They assess how well it has been maintained and its expected lifespan. An HVAC system over 20 years old, might need replacing to obtain coverage.

The inspector aims to understand the system’s condition, potential issues, and lifespan. Insurers also want to ensure the system is relatively new (6-10 years old) and works well to provide proper coverage.

How to Prepare For (and Pass) a 4-Point Inspection

To prepare for and ultimately pass a 4-point inspection smoothly and avoid extra insurance costs, it’s crucial to check and possibly fix your home’s main systems (roof, electrical, plumbing, HVAC) before the inspection.

Here’s a checklist to prepare your home and address any safety concerns:

1. Roof Check: Hire a professional to inspect the roof. Replace damaged or missing shingles, visible water damage, or holes.
2. Electrical Safety: Look for exposed wiring and signs of electrical issues like double-tapped breakers or old fuse boxes. Consider updating outdated 2-prong outlets and immediately address fire hazards like missing smoke detectors or overloaded circuits.
3. Plumbing Inspection: Check for leaks, water damage on walls, and worn-out pipes. Consider updating obsolete polybutylene piping and replacing old water heaters.
4. HVAC System: Ensure your central heating and cooling systems are up to date, and repair damaged ductwork. Avoid using fireplaces, oil furnaces, or window AC units as primary heating and air conditioning sources.

By following these steps, you can ensure your home is ready for a 4-point inspection.

4-Point Inspection vs. Wind Mitigation vs. Full Home Inspection

4-point and wind mitigation inspections help insurance companies assess risk. A full home inspection is more comprehensive and helps a buyer or seller better understand the property’s condition.

4-Point Inspection:

• Focus: Evaluate the four major systems of a home: roofing, electrical, plumbing, and HVAC.
• Purpose: Often required by insurance companies to assess the condition of these systems and identify potential safety hazards or insurance issues.
• Scope: Limited to the four specified systems. Does not provide a comprehensive evaluation of the entire property.
• Common in: Older homes or homes in areas where insurance risks are a concern.

Wind Mitigation Inspection:

• Focus: Assesses a home’s structure for features that minimize damage during high winds or storms, such as hurricanes.
• Purpose: Identifies construction features that reduce wind damage, which can lead to insurance discounts in hurricane-prone areas. These include proper roof-to-wall strapping and hurricane shutters.
• Scope: Examines roof shape and construction, window and door coverings, and other specific features contributing to a home’s ability to withstand wind.
• Common in: Coastal areas or regions prone to high winds and hurricanes.

Full Home Inspection:

• Focus: Provides a comprehensive evaluation of the entire property, including structural elements, systems, and other home components.
• Purpose: Gives a detailed overview of the property’s condition, identifying any repairs or maintenance that may be needed.
• Scope: Covers all major systems (like a 4-point inspection), structural integrity, appliances, and other home elements.
• Common in: Home buying or selling processes to inform the parties about the property’s condition.

Each type of inspection serves a different purpose and provides specific information about a property’s condition, which can be crucial for maintenance, insurance, or transactional decisions.

How Much Does a 4-Point Inspection Cost?

4-point inspection costs range from $100 to $250 depending on where you live and the inspector’s expertise. Choosing a certified professional inspector will ensure you get the most comprehensive report that insurers trust.

If you are buying an older home and need an insurance inspection, contact the professional home inspector you hired for your buyer’s inspection. If it is within 30 days, they may complete the insurance company’s 4-point inspection form for a reduced rate, provided a reinspection is not required.

Impact of a 4-Point Inspection on Insurance Rates

The findings from a 4-point inspection can influence your insurance premium. If issues are identified within the four key components, necessary repairs or upgrades might be required for policy approval.

Insurers aim to provide secure coverage against property damage in these areas, making it crucial to address any identified problems.

Achieving a “pass” status on your inspection report by making the required repairs or upgrades should maintain your insurance rate. However, discovering excessively old or irreparable components might lead to higher rates unless the policyholder makes necessary updates.

What if You Don’t Pass the Inspection?

Failing a 4-point inspection is possible, especially if the home’s major components are significantly worn or outdated. Not passing the inspection typically necessitates updates.

While your insurance provider won’t instantly cancel your policy if you fail the inspection, they might demand specific repairs or upgrades before offering coverage, potentially leading to a higher rate. Diligently reviewing your inspection report and resolving any issues is crucial for securing the best rate.

The significance of the 4-point inspection in obtaining favorable insurance rates cannot be overstated. Proactive preparation and addressing necessary repairs or upgrades can ensure a smooth process.