Insurance carriers have seen a rise in losses on homeowners’ insurance, causing some insurance carriers to be downgraded or go insolvent. As a result, rates continue to increase based on various factors. Actuaries develop rates based on data;  statistically, the older a home gets, the greater the probability of a loss. When a home reaches 20 years of age, the probability of a loss grows exponentially. At 30 years, a loss is foreseeable, and at 40 years, a loss is inevitable.

To protect themselves, insurance carriers require homeowners to be more proactive regarding preventative maintenance. Investing in updates can be less expensive in the long run than paying inflated premiums. Additionally, carriers are only approving about 20% of the applications, helping to create a need to make their homes more desirable to be considered for a competitively priced policy.

4-Point Inspections are seen primarily in Florida. However, catastrophic insurance events are happening all over the country at an increasing rate. Northern insurance underwriters may soon adopt preventative maintenance strategies, similar to how they have adopted separate wind and hail deductibles comparable to what is seen in Florida. Here is a general breakdown of what insurance carriers are looking for in a Florida 4-Point Inspection:

ELECTRICAL: Most insurance carriers want to see new electrical panels installed if the home is over 25 years of age. Homeowners should also consider changing plugs and switches during this upgrade. These updates can significantly decrease the probability of a fire loss.

HVAC (HEATING & COOLING): Most insurance companies want to see HVAC equipment less than 15 years of age (ideally less than ten years of age).

PLUMBING: A significant amount of home insurance claims are caused by preventable water damage losses. Insurance companies want to see water heaters less than eight years of age. All water lines under sinks, feeding appliances and toilets should also be upgraded to steel braided hoses with metal couplings. Plastic water valves connected to hoses should also be upgraded to stainless steel. These small investments can decrease the probability of water damage losses.

ROOF: From an insurance perspective, a roof reaches end-of-life after 20 years of age. However, many preferred insurance carriers in Florida may not write a policy for a home with a roof older than 10-15 years of age.

These suggested improvements are examples of items that can be addressed as your home ages. By upgrading and maintaining various aspects of your property, such as the roof, plumbing and electrical systems, you help mitigate potential risks and demonstrate your commitment to maintaining a safe and secure living environment. These improvements help reduce the likelihood of insurance claims, thereby minimizing the financial risk for insurance providers. Ultimately, by making your home more desirable for insurance carriers through thoughtful improvements, you can increase your chances of obtaining comprehensive coverage and potentially qualify for lower premiums, helping to provide peace of mind and potential financial savings in the long run.

Brent M Hoedeman

Personal Insurance Advisor