“Inspection” can be defined as the testing, measuring, and gauging of the characteristics of an activity or an object. In the property inspection industry, this testing and gauging applies to the condition of a property and the level of risk it represents to whoever is considering buying or insuring it. You, as an insurance underwriter, will use the information submitted to you by your property inspector to determine whether a property should be insured by your insurance provider and, if so, at what premium cost to the insured.
There are a variety of property inspection types, each of which utilizes one or more items of today’s inspection technology. The following are inspection types done for insurance providers:
- Pre-Approval Inspection – An important tool utilized as a part of the underwriting process to provide you, the underwriter, with important information that may affect your decision regarding whether or not to offer coverage to an insurance policy applicant. This inspection will also play a role in determining what types and the amount of coverage to recommend in a policy and an accurate amount of premium to charge.
- Routine Inspection – May be ordered when a significant change has been made to a property such as a remodel or the addition of a swimming pool, to ensure that the installation was done properly and that all safety guidelines are being followed.
- Claims Follow-Up Inspection – After a significant claim has been submitted by a policyholder, such as after a fire or a major storm causing damage, an inspection may be made to determine the extent of the damage to help calculate an equitable payoff amount.
- Follow-Up Inspection to Determine Compliance – When a pre-approval inspection has been conducted and a significant number of problems have been found by your inspector, you may opt to notify the policy applicant that certain steps must be taken in order to bring the property up to an acceptable level of risk. Once you’re notified that these fixes have been made, another inspection may be called for in order to verify compliance.
Residential Inspections for Buyers and Sellers
Property inspections are important not only for an insurance company underwriting a home policy but also for prospective home buyers as part of the buying transaction. The average home buyer knows little to nothing about real estate, and hiring a professional home inspector with the knowledge and skills to detect potential risks or costly problems before a sales agreement is made is a smart move. A buyer will want to have a thorough check of the home’s:
- Structural integrity
- HVAC system
- Plumbing system
- Electrical system
Any serious problems with any of these systems can mean repairs costing thousands of dollars, and the few hundred spent on a top-quality inspection will be well worth the expense. As the future insurer, you can also use the information gathered to aid with the underwriting process, although you may still require an even more comprehensive inspection for your underwriting purposes.
An important add-on to any real estate purchase contract a buyer should always consider is an inspection contingency clause. This clause allows the buyer to cancel a purchase contract if any problems are found during the inspection that the buyer is unwilling to accept. Sometimes a cost of repair contingency will be used. This allows the buyer to terminate the contract only if repairs required on the house meet a certain threshold, such as $10,000.
Ever-Improving Insurance Inspection Technology
Steady advances in inspection technology and improved methods for gathering data are driving various changes in the property inspection process. Inspection technology advancements include the introduction of computer tablets, which make the creation of inspection reports possible while still in the field conducting the inspection. This is made possible by having inspection software available for entering data into a tablet while progressing through an inspection.
The days of inspectors doing inspections with a pen, paper, and point-and-shoot camera, then having to go back to the office to transpose the data into the office computer, are slowly coming to an end. Today’s inspection technology like computer tablets, smartphones, and wireless internet access make home inspections quicker, easier, and less costly. Chief among these technological improvements are today’s smartphones.
Besides making a call or sending a text, a significant number of tasks relating to homeowners’ insurance inspections can be done using smartphones that improve the inspection process. Smartphones are fantastic data gathering equipment that can easily be carried around an inspection site and used for innumerable tasks, such as:
- Equipped with quality mobile inspection reporting software, a smartphone replaces the need for taking notes with pencil and paper on a clipboard and later having to transcribe these notes at the office. This saves time, effort, and resources.
- Photos can be taken during an inspection and seamlessly put into the developing inspection report. Today’s smartphone cameras rival many regular 35mm cameras in quality.
- Your property inspector can compile and forward their inspection report while still on location, speeding up the process, saving time and money. Even without an internet connection for forwarding a report, a smartphone is still valuable as a data collection device.
- Smartphones enabled with a voice recognition application allow inspectors to simply dictate inspection findings into a report while on the property being inspected.
- Coupled with an unmanned aerial vehicle, or drone, a smartphone can be used to inspect a rooftop without setting foot on that roof. This is especially helpful when looking at hard-to-reach areas such as a church steeple or communications tower and makes conducting an inspection much safer for the inspector.
- The use of a drone with a smartphone onboard allows inspectors to view the entirety of a large property without a boots-on-the-ground approach. They can also view areas beyond the property borders for risks that may exist there, possibly creating potential risk to the property being inspected.
- For policyholders eligible to conduct self-inspections, perhaps on a vacation home rarely occupied, smartphones can be used to compile a report, including photos, to forward to your underwriting office.
Other Advancements in Inspection Technology
In addition to the communication devices and drones already discussed, there are a number of other tech devices that have also made their way into your property inspector’s toolbag.
Infrared (IR) cameras are lightweight, cutting-edge devices that help property inspectors understand different systems and components in the building they’re inspecting. Although it is by no means new technology, with the technology having been discovered more than 200 years ago, IR cameras were used by the US military after WWII for imaging in restricted areas and later by Swedish company Agema, who was the first to use IR scanning cameras for inspecting power lines.
Home inspectors use IR thermal imaging for looking at electric panels and outlets to detect any hot spots. It’s also useful for detecting unwanted moisture in walls, roof leaks, problems with insulation, and certain structural defects.
When hiring a home inspector, you want someone who’s current with the latest inspection technologies. Insurance Risk Services provides the highest quality home inspections and underwriting support services that you want. Contact us for more information.