I recently had two transactions where the home passed its four-point inspection and the insurance company still wouldn’t bind a policy.
If you’re buying an older home in Florida, you need to understand how that happens, because it can stop a closing.
What a four-point inspection is
On older homes, most Florida insurers want a four-point inspection before they’ll write a policy. It looks at four systems: the roof, the electrical, the plumbing, and the air conditioning. The inspector reports the age and condition of each one.
Here’s the part buyers miss. The inspector reports. The insurance company decides.
What happened
On the first home, the insurer looked at the report and decided the roof needed to be replaced. On the second, it was the electrical panel, a GE panel about 42 years old. Both homes passed the inspection. The underwriter still said no.
A passed inspection is not an approved policy.
What to do about it
If you’re a buyer, get your insurance agent involved early in your inspection period, not the week before closing. Send them the four-point as soon as you have it and ask a direct question: will you bind this house as it sits, and if not, what has to change?
Ask the seller early for the age of the roof, the brand and age of the electrical panel, the type and age of the plumbing, and the age of the A/C. Those are the same four systems the insurance company is looking at.
Then talk with your agent about how your contract handles it. If the roof or panel has to be replaced, you need to know who pays for it and whether you still have time to negotiate or walk away.
If you’re a seller of an older home, find out before you list. A roof or panel problem you learn about from the buyer’s insurance agent costs you time and leverage. One you know about up front is just part of the pricing conversation.
Insurance has become one of the biggest moving parts in Florida real estate. Before you make an expensive decision, let’s look at the complete picture. Call or text me at 727-409-4663.
Randal Jenkins
Broker-Owner, Florida Real Estate Partners
Loan Officer, American Mortgage Services, NMLS #2053417
727-409-4663 (409-HOME)
