Insurance & Home Inspection 101 Presented by Michael Ludwig and Melissa Menikheim

Overview of Presentation Inspectors Perspective Insurance Company Perspective Realtor Perspective Feel Free to Ask Questions

Close More Deals!! 4 Point is for Eligibility Each Company has different guidelines Wind Mitigation Affects Pricing Can Save up to 70% Challenge for Insurance Which Report needs to be done and when

4 Point Inspection

4 Point Inspection What is it? Roof HVAC Plumbing Systems Electrical Panel and Wiring Condition, Life Expectancy and Deficiencies

4 Point Inspection WHO COMPLETES THE 4-POINT INSPECTION? Inspections must be completed and signed by either a Florida licensed general or building contractor; building inspector; architect; engineer; or by a member of the American Society of Home Inspectors (ASHI); the Florida Association of Building Inspectors (FABI); or the National Association of Certified Home Inspectors (NACHI

4 Point Inspection DOES IT MATTER WHEN THE 4-POINT INSPECTION WAS COMPLETED? Generally, 4-point inspections must have been completed within the last year (12 months) to be accepted. However, we may make an exception to accept a 4-point that is less than three years old, assuming that the inspection is favorable and current photos are provided

4 Point Inspection

4 Point Inspection

Roofing Year of Roof Date of Last Update (full or partial) Roof covering Material (shingles, Tile, Membrane) Sign of damage of leaks Condition (excellent, good, fair, poor) ROOF USEFUL REMAINING LIFE

Typically Last 15 to 20 years STANDARD SHINGLE Typically Last 15 to 20 years

ARCHITECTURAL SHINGLE Typically last 20 Years

Typically last 25 to 35 Years Tile Roof Typically last 25 to 35 Years

Typically over Flat Roof System Lasts roughly 8-10 Years Rolled Roof Typically over Flat Roof System Lasts roughly 8-10 Years

Typically lasts 8-10 Years Modified Bitumen Similar to Rolled Typically lasts 8-10 Years

Common Roof Issues Lifting/Curling shingles Deteriorating shingles

Common Roof Issues Patched Roof Damaged/Broken Tiles

Roof Insurance Co Looking for 4+ years life left Overall Condition Some companies require 5 Overall Condition No Deficiencies No Patches No missing Tiles or Shingles No Evidence of Leaks Photos must be included

HVAC (Air Conditioning and Heat) System must run on gas or electricity Window/wall units not eligible Space heaters, fireplaces (primary heat source) wood/coal burning stoves a no-go Central Heat or Heat Pump typically last 20 to 25 years and must be functional

HVAC A/C UNIT OR HEAT PUMP AIR HANDLER

Plumbing •The water heater must be in favorable condition and it should have sufficient useful life remaining. The typical useful life of a water heater is 12-15 years, but it is possible for them to last longer if well maintained. However, if 20 years old or greater, a replacement will likely be required. Lastly, we require that there is a temperature/pressure relief valve (TPR valve) installed. •Polybutylene or PEX pipes in use in any part of the plumbing system would cause the risk to be ineligible and replacement of the ineligible pipes would be required prior to insuring.

Plumbing Pex Plumbing FAQs ABOUT PLUMBING Why is PEX plumbing an unacceptable material for most ins companies? PEX plumbing is ineligible due to concerns associated with the material that significantly increase the likelihood of loss. The material is often installed incorrectly or fails to work property due to design/manufacturing defects. Our extensive research has shown that the fittings are prone to dezincification, which causes blockages and reduces the mechanical strength of the fitting. Also, exposure to sunlight and chlorine can significantly decrease the dependability of the pipes themselves.

Pex

PLUMBING MATERIALS PVC Copper

PLUMBING MATERIALS CAST IRON GALVANIZED

Electrical System ELECTRICAL •The electrical system must be sufficient for use for the size of the home and the entire electrical system must be grounded. The minimum amperage for the main panel is 100 amps but sub-panels may be less than 100 amps. •No ineligible materials may be in use. The following materials are ineligible: ─ Fuses ─ Knob and Tube wiring ─ Federal Pacific, Stab-Lok, Zinsco, Challenger, ─ Double-tapped breakers or Sylvania electrical panels ─ Aluminum branch wiring ─ Cloth-sheathed wiring NOTE: Aluminum wiring only used to service the home (referred to as the main, service or entry wire) and/ or used for major appliances is acceptable. The 4-point inspection must confirm this in order for us to accept a home with aluminum wiring.

ELECTRIC PANEL

Electrical Unacceptable Wiring Components ALUMINUM WIRING KNOB & TUBE WIRING

UNACCEPTABLE WIRING/ COMPONENTS DOUBLE-TAPPED BREAKER NOTE: Two wires connected to a single breaker CLOTH SHEATHED WIRING

Recent Electrical Issues Sylvania, Challenger and Federal Pacific Panels Double Tapped Breakers Aluminum wiring Exposed wiring Melted wires Will have to be remediated Prior to/or within 30 days of closing Some companies will not accept until remediated

Questions on 4 Point Inspections??

Wind Mitigation Inspections

Wind Mitigation Inspections What is it? When to perform? Cost? Negative Impact? Positive Impact? How often does it help lower insurance rates? How often does in increase insurance rates?

Wind Mitigation Inspection Identifies features of property that make it more resisitant against wind and hurricane forces, resulting in a lower insurance premium Have it performed on each and every deal!! Pricing varies between $65 and $125 Cannot negatively impact deal or pricing Can result in up to 70% total discount on insurance premium $$$$

Wind Mitigation Inspection Lowers Insurance Rates about 95% of the time 5 out of every 100 homes do not qualify (rare) NEVER INCREASES INSURANCE COSTS OR RATES- NEVER! Many times it is not completed Pricing could kill a deal without it Example

Wind Mitigation 1978, 3200 Sq Foot Home in Pinellas County quote without wind mitigation inspection $4276 Home has newer Roof, Proper Nail Spacing, Hip roof shape and hurricane clips New Rate with credits $1629 per year

What Credits Are Available 1. Roof Covering 2. Roof Deck Attachment 3. Roof to Wall Attachment 4. Roof Geometry 5. Secondary Water Resistance (SWR) 6. Opening Protection

Roof Covering If the roof meets the 2002 FBC then a credit will apply. This means if roof was put on home after 2002 (if done to code with permit) then they will save money on insurance premiums. Average Discount 7% to 15% depending on company

Roof Decking Attachment 3. Roof Deck Attachment: What is the weakest form of roof deck attachment? 􀀀 A. Plywood/Oriented strand board (OSB) roof sheathing attached to the roof truss/rafter … 􀀀 B. Plywood/OSB roof sheathing with a minimum thickness of 7/16”inch attached to the roof truss/rafter (spaced a maximum of… 􀀀 C. Plywood/OSB roof sheathing with a minimum thickness of 7/16”inch attached to the roof truss/rafter (spaced a maximum of…

* Roof to Wall Attachment Toe Nails Clips Single Wraps Double Wraps Structural Other/Unknown/No Attic Access Most common, biggest credits can apply here (15% to 35% depending on company) No way of knowing without WM inspection

Hurricane Clips

Roof to Wall Connections Single Wrap: Double Wrap:

Roof Geometry

Roof Geometry The shape of the roof can result in a credit if the roof is 90% HIP Gable is most common- No credit Flat is common- No credit Hip- slopes down toward ground on all sides Perpendicular framing permits winds to flow over roof with less resistance Credits can be 25% to 50% for ins

Secondary Water Resistance (SWR) Self Adhering Roofing Underlayment installed directly to the roof deckling beneath the actual primary roof covering Great for peace of mind (especially during rainy season) Not very expensive to install Minimal insurance credits (2% to 10%)

Opening Protection All openings must be protected including windows, doors, sliding doors, garage door and skylights.

Thank You for Your Attention! Call Mike Ludwig 727-213-1890 Call Melissa Menikheim 727-786-4663