Various Property Inspection Types

Various Property Inspection Types
There’s an old saying that applies well to parents and other supervisors: “Don’t expect what you don’t inspect.” In the insurance business, a comprehensive property inspection is an important aspect of an accurate underwriting process for determining the viability and cost of a property insurance policy.
An insurance property inspection is just one of several types of inspections that property owners may be required to undergo. Some of the others include:

  • City Inspections
  • State Inspections
  • Construction Inspections
  • Bank Inspections
  • Third-Party General Inspections

The type and use of a property will determine which of the above inspections will be required, but a bank inspection will almost always be needed if the property is being purchased with financing and an insurance inspection will usually be required before an insurance policy can be written to protect the property.

What a Property Inspection Tells an Insurer
City inspections are often conducted for the purpose of issuing a Certificate of Occupancy (CO), which certifies a property is fit for habitation. These inspections are primarily required for new construction after a renovation. This type of inspection typically concerns itself with health and safety issues, in which case a Certificate of Habitability may be issued.

Construction Inspections
Construction inspections are typically handled by the city building department inspector(s) to ensure that any new construction or renovation being done complies with current building code requirements. This would not only include items such as framing, drywall installation, roofing, and siding, but would typically also include areas such as plumbing, electrical and fire safety.

Bank Inspections
A bank may require a property inspection if they’re lending you money for the property’s purchase or if you’re selling the property to someone who’s trying to obtain a mortgage from that bank. The important aspects of this inspection include ensuring that the property’s value is at least as much as they’ll be lending toward its purchase. This will often involve a third-party appraiser.

This inspection should also uncover any glaring problems and an environmental inspection may be called for if there’s any suspected problem with radon, mold, asbestos, lead or mercury.

Third-Party General Inspections
These inspections are undertaken when a property is being sold and the purchaser wants assurance that there are no major problems with the property. If it’s a home inspection, the inspector will typically concern him or herself with areas such as the foundation, proper drainage, roof construction and condition, heating and cooling systems, chimney condition, electrical system, windows, doors, sewer and plumbing. An environmental inspection may also be ordered, checking for asbestos, radon, mold, lead, mercury and leakage from oil tanks. A termite inspection may also be included.

Insurance Inspections
Insurance inspections, which are our specialty here at Insurance Risk Services, take in a little bit of all the areas explained above. Since insurance companies are in the business of risk assumption on behalf of their policyholders, our objective is to produce accurate underwriting reports to help our clients determine which risks are worth assuming.

Whether a residential inspection or an inspection on a commercial occupancy, a high-quality insurance inspection is critical in helping you not only determine whether a particular property represents a worthwhile insurance risk but also what the cost of a policy should be. The answer to these questions can only be ascertained with the help of an all-encompassing inspection and custom report to provide field service underwriting support.

For more than 35 years we have been providing a comprehensive range of property inspection services and insurance underwriting support nationwide. Put our powerful tools to work for your company too. Call us today.