I have been asked a couple of time what are the "Red Flags" that trigger an insurance company to look at a home with the intent of dropping or not ever covering a home, or a mortgage not being issued. This can be a serious problem when a person is trying to buy a home, or they have already bought it and then they are dropped. Many insurers and lenders will not even entertain covering a home that is over 30-40 years of age without an inspection of the major systems. They call them 4-Point inspections.
Over the years I have seen the following electrical items cause problems with obtaining insurance or a mortgage:
- Knob and Tube wiring
- Fuse panels (old screw in type fuses)
- Federal Pacific Electric panels (FPE)
- Zinsco electrical panels (also known as Sylvania/Zinsco)
- 60 Amp service
I have also seen the following items causing problems with coverage:
- EIFS clad homes
- Homes with a previous history of water damage
- Homes located in a flood zone
- Lead water pipes
- Hail damage to the roof and other items around a home
- Foundation problems
- Severe termite damage
- High levels of radon gas without a mitigation system
- Poor drainage around the home
- Septic tank problems
- Missing or no permits when the home was built
I'm sure others could add on to my list, but this is just what I have been involved with over the years. Needles to say, agents need to be advising all of their clients that they need a home inspection. Regardless of the age or condition of the property.
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Scott - thanks for the tips. Do you have any info on Zinsco panels? There was some chatter about them at the ASHI forum, but no concrete documentation of any problems. Also, do you think an insurance company would have problems with an elevated radon level? Aren't they insuring the property (not people's health)?