I recently purchased a quadplex and the insurance company is asking for an internal inspection. Quadplex was made in 1987. About the unit the roof is about 5 years old. HVAC one is 8 years old and the other are 13 years old. Water heater were manufactured in 1981 (probably original install). But, everything is in working order.
I got the property VIA FHA and passed the FHA inspection. I am not sure how different that is from the insurance inspection.
I'm concerned that the insurance company is going to have me make "HUGE" repairs. Is there anything I should be concerned about?
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
7y
Allstate inspections are no big deal as long as you are up to code. They are looking for risks, not repairs, those will be on you to make in the future.
I’ve had to prove a “loose roof tile” was a vent, and strap a water heater to the wall and have a tenant remove a trampoline.
@Bill B. Is this different than FHA inspection? Which is more strict? And when you say allstate is that an umbrella term? Since the company I am using is not all state.
I believe I am up to code, but have no idea what that really means. But, as part of my FHA the seller did fix some concerns. Like the balcony handrail, rooting wood, and put on electrical covers.
You said insurance inspection so I was just telling you what my insurance company looked for. Those three items are over 20 years at 13 properties. I was saying in my experience they were pretty simple procedures. Though my properties are less than 25 years old, no basement with stucco siding and tile roofs. So your experience could certainly vary.
They shouldn’t complain about anything you wouldn’t want fixed anyway.
@Bill B. I see what you are saying. That they look for risk and not repair. There really isn't much for me to worry about. But the repairs in the future are on me.
I didn't quite understand your statement "Those three items are over 20 years at 13 properties. If you don't mind can you elaborate.
What do you mean "and you should be scared."? But, I do understand what you're saying in terms of they only found 3 problems in 250 opportunities. Obviously, if there are any risk I will take care of it. Just don't want to spend Un-necessary money on repairs that don't make sense.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
With what you described, it doesn't sound like something you should be particularly worried about. They might ask you to fix a couple things (particularly trip hazards) but I doubt it will be a big thing.
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
I wouldn’t worry. The only thing I’ve gotten ‘dinged’ on during an insurance inspection is a 2nd floor door that opened up onto nothing (an old removed deck I guess). It was on the reno plan to close off the door regardless. They asked for photos once it was closed off. That’s it!
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
@Robert Hernandez Your insurance is not nearly as picky as fha, little to worry about. But, with water heaters almost 40 years old?....I’d have replaced those Day 1, when they fail, the water damage could be very expensive.
@Wayne Brooks I plan to replace the water heaters very soon in phases over this year. But, I am worried that my insurance says I need to replace all of them in a month or they will cancel my policy. Is that likely? Thank you for the advice!
@Mike McCarthy wow that was all they asked for. Did you have old applications like myself, i'm really worried they just tell me to replace my old water heater and HVAC. Which I plan to replace, just not right away.
Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
7y
Insurance might be looking for liability concerns. I am not sure they look for code violations (mine didn't). Obvious needed repairs like broken windows, beeping smoke alarms, water leaks they would want addressed.
They are also looking for signs of pets to make sure there is no animal on their aggressive breeds list. They usually want vaccination records, bite history and other documentation of pets.
They are also looking at trampolines, tiki torches, fire pits, BBQ grills under a tree on the outside.
They also look at plumbing, electrical and framing. For example if they see polybutylene pipes they will note it then you will get a letter telling you water damaged is now excluded from your policy. If there is no access to the attic and you are in a hurricane zone they will lower their coverage because they can't verify the spacing and type of hurricane straps, if any.
They also take tons of pictures of your place for references. If you have a clause three years from now, and your conditions are different from the pictures they took, they can refuse your claim because you didn't inform them of your improvements, many companies now require you to notify them of work bring done if you fail to do so they can refuse your claim.
@Dennis M. From your experience would the insurance company tell me to replace the old water heater, they are 30+. I plan to replace them DIY, but would rather not have to replace all of them in a span of 2-3 week.
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
@Robert Hernandez I've never heard of insurance companies being picky on what gets replaced. Some items may get depreciated on your policy. One house has an older roof, so there's a clause in the policy that the roof will only be replaced up to 25% of the cost (or something like that). I can't really expect them to give me a brand new roof if the current one is already ~30 years old.
If you end up having significant issues with this company, you can always get a policy from another. There are LOTS of insurance companies out there.
Rental Property Investor · Member since 2018 · 483 posts · 956 votes
7y
I bought a foreclosure that was unoccupied for 7 years. The insurance inspector looked over the house and wanted to know what I was going to update. That was it, they never came back to confirm I did anything.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
@Robert Hernandez I figured that’s what it was. They’re just looking at the mechanicals.....Roof, Electrical, Plumbing and HVAC....standard inspection for all policies. They’re not looking at flooring, paint, cosmetics, etc.
@Wayne Brooks Being that they are looking at the mechanicals. Would they have me replace the old HVAC and water application since they are old, they are all in working condition. Or have you had any experience with old mechanical part? Thank you for the help too!
@Wayne Brooks That is great new! I am not too worried anymore. Roof is 5 years old and has no leaks that I am aware of. And everything is in working order.
DIY replace water heater, but won't have the time for a couple months. Thank you for all your help so far. Wish me luck on the inspection and my real estate career! You're awesome!
Southern California · Member since 2015 · 11 posts · 3 votes
5y
A few months ago an insurance inspector decided that I needed to get a new roof on my rental house. He felt there was too much shingle granule loss. I didn't agree because the roof looked to be in good order. I'd made a few repairs here and there when high winds had blown off a shingle but, overall, the roof looked great, it didn't leak and the shingles were still pliable. I talked to two roofing contractors that estimated it had another 5 years to go. I didn't make any headway explaining that to the insurance company though. They were adamant and so I paid to get a new roof 5 years earlier than needed.
Now, I've got another inspection coming but this time on the house I live in personally. I didn't even realize that insurance companies did that on regular non-income properties. I'm wondering what surprises might be in store 🤦♂️For instance, we have a trampoline and a tree house. Will my rates go up? Does anyone know how this works?