What Is a 4-Point Inspection for Homeowners Insurance?

When purchasing a home, understanding its condition is important, but securing homeowners insurance is also essential. Rather than requiring a full home inspection, insurers only require a four-point inspection of major home systems. Homeowners insurance is a smart move for homeowners that offers you peace of mind and protects your investment. Read on to understand how a 4-point inspection works. 

Understanding 4-Point Inspections

A 4-point inspection is a detailed assessment of four major areas of a property: the roof, electrical system, plumbing and HVAC (heating, ventilation, and air conditioning) system. It is usually requested by insurance companies to determine the condition of these crucial components before providing coverage. If the four-point inspection shows issues or aspects of these major components that may wear out within two or three years, it can affect insurance premiums. 

While most insurers require a four-point inspection, it's a priority when purchasing an older home or renewing or obtaining homeowners insurance coverage. Insurance companies use the inspection findings to assess the property's insurability and premium rates.

A four-point inspection should be conducted by a qualified and licensed home inspector who has expertise in evaluating the specific areas covered by the inspection. Hiring a professional with experience in this type of assessment is crucial.

For example, if you plan to get home insurance coverage for a home older than 5 years, the four-point inspection may turn up issues that could emerge within the next few years. Based on that, the home insurance company will determine the financial risks in insuring the property and set the premium accordingly. 

As an alternative, investors or new homeowners can use a four-point inspection to gauge whether the property is worth the asking price and current market conditions, considering the condition of the property and issues that could become a huge expense. 

What Does a 4-Point Inspection Cover?

A four-point inspection covers the four major systems of a home: the electrical, plumbing, roofing, and HVAC (heating, ventilation, and air conditioning) systems.  

HVAC (Heating, Ventilation and Air Conditioning)

The heating, ventilation and air conditioning system is a central vein of the home that can cause major issues. The HVAC controls the climate in the home, but improperly installed or outdated HVAC systems increase the risk of poor air quality or dust accumulation, potentially causing health complications.

A licensed inspector examining the HVAC unit will confirm the following:

• The fully functioning heating and cooling unit is appropriate for the home.
• The condition and age of the HVAC system, including its life expectancy.

Note that if an HVAC unit is over 20 years old, you may have to replace or update the system.

Electrical

The electrical inspection checks that the wiring and electrical system are up to code. For example, all electrical outlets must be grounded, and the system size must be correct for the size of the house. If the inspector finds a code violation in the house, it could still pass. It depends on the level of risk the violation presents. 

For example, the inspection will also check whether the home has aluminum, knob-and-tube or copper wiring because this increases fire risk and often makes the home uninsurable. Fuses or fuse boxes, double-tapped breakers or cloth-and-sheath wiring all present increased risk. 

Plumbing

The plumbing inspection will include an evaluation of the age of the plumbing and materials used in the house's drain and supply lines. The inspector will look for signs of wear or leakage. They will also check the water heater to ensure it's distributing water efficiently throughout the house. 

Roofing

The roofing portion of the inspection is usually the most comprehensive, as the roof is integral to the home's overall integrity. A leaking or poorly constructed roof can lead to energy inefficiency and excess moisture, leading to further structural damage or mold. For that reason, inspectors will check the roof for safety and health risks for the home and homeowners. They will look for signs of leakage or deterioration that could allow pools of water to form or enter the home or existing water damage.

Inspectors look at the roof's age, structure and for signs of deterioration or leakage. For example, replacing your roof after about 20 years is standard advice to prevent cracking, curling or other defects. If you have an older roof, consider repairs and regular maintenance to extend its life. 

Roof shape can significantly impact the roof's ability to withstand extreme weather. Roofs with four points that come together to create a ridge, called hip roofs, are most common for protection against high winds and snow. Certain roof structures may put your home at greater risk. 

What Is the Difference Between 4-Point Inspection vs. Full Inspection?

A four-point inspection doesn't include all the points covered in a full inspection. It only covers four major home systems. A complete home inspection is more comprehensive and is recommended before purchasing a house. Areas that aren't covered in a four-point inspection that a comprehensive inspection will consider include:

• Drainage and grading
• Doors and windows
• Appliances
• Foundation, interior and exterior structure of the home

A comprehensive inspection will also thoroughly review the plumbing, electrical systems, roofing and HVAC and may perform specialized inspections, such as a chimney or pool inspection. 

What Are the Benefits of a 4-Point Inspection?

 A four-point inspection offers numerous benefits. It's a low-cost way to guarantee the condition of the real estate to avoid future problems. Pros of getting a four-point inspection include:

• Fast: It’s sually done in as little as two hours.
• Inexpensive: At a price of a few hundred dollars, it's a low-cost way to avoid major problems in the future.
• Guaranteed: If you plan to sell your home, you can use the inspection to understand issues you must address or disclose. If you're purchasing the home, you'll know exactly what you're getting.
• Prevents future issues: When you preemptively check the major systems in the home, you can get ahead of repairs and prevent major breakdowns with regular maintenance. 

How Much Does a 4-Point Home Inspection Cost?

The cost of a four-point inspection is generally less than a standard inspection. It can vary depending on factors such as the location, property size and the inspector's fees. On average, you can expect to pay anywhere between $100 and $400 for this type of inspection. 

What Happens if There Are Issues Found During the Inspection?

If issues are found during the four-point inspection, it is usually the responsibility of the homeowner to address them. Depending on the severity of the issues, repairs or upgrades may be required before insurance coverage can be obtained. It's essential to work with professionals to resolve any problems for the safety and insurability of your property.

Tips to Protect Your Investment

A four-point inspection is the first step to secure homeowners insurance and protect your home's value. In addition to gaining peace of mind from the insurance, knowing the condition of your home's major systems can help plan repairs. You can work with trusted contractors to get ahead of repairs and implement steps to optimize the useful life of your roof, electrical system, plumbing and HVAC. Interested in purchasing a home for investment? Learn how to buy a rental property or find other ideas for real estate investing here. 

Frequently Asked Questions