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

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

3. 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. 4 Point Inspection

5. 4 Point Inspection What is it? Roof HVAC Plumbing Systems
Electrical Panel and Wiring
Condition, Life Expectancy and Deficiencies

6. 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

7. 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

8. 4 Point Inspection

9. 4 Point Inspection

10. 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

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

12. ARCHITECTURAL SHINGLE
Typically last 20 Years

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

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

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

16. Common Roof Issues
Lifting/Curling shingles
Deteriorating shingles

17. Common Roof Issues
Patched Roof
Damaged/Broken Tiles

18. 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

19. 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

20. HVAC
A/C UNIT OR HEAT PUMP
AIR HANDLER

21. 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 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.

22. 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.

23. Pex

24. PLUMBING MATERIALS
PVC
Copper

25. PLUMBING MATERIALS
CAST IRON
GALVANIZED

26. 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.

27. ELECTRIC PANEL

28. Electrical Unacceptable Wiring Components
ALUMINUM WIRING
KNOB & TUBE WIRING

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

30. 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

31. Questions on 4 Point Inspections??

32. Wind Mitigation Inspections

33. 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?

34. 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 $$$$

35. 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

36. 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

37. 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

38. 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

39. 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…

40. * 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

41. Hurricane Clips

42. Roof to Wall Connections
Single Wrap:
Double Wrap:

43. Roof Geometry

44. 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

45. 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%)

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

47. Thank You for Your Attention!
Call Mike Ludwig
Call Melissa Menikheim