Reports & Insurance Companies

An insurance company wants my inspection report. Should I give them a copy?

Question: I completed an inspection last week, and the customer has an insurance agent pricing homeowners insurance for them. The insurance company wants my inspection report. They also sent me a form requesting me to sign off on HVAC, electrical, plumbing, and roofing, stating all systems are in good working condition. I’m hesitant. I don’t want to be held liable for my customer’s home insurance. What should I do?

– ASHI Home Inspector

Answer: We get a lot of questions about inspection report writing and how to make recommendations in a report. It’s not every day we hear stories about homeowners insurance companies asking inspectors to share their reports or sign off on their work.

Depending on the context, you may have a right to be concerned. Or it could be a common, low-risk exchange.

Let’s break down two important factors in this scenario.

1. The 4-Point Inspection

This inspector is referring to a 4-point inspection. Unlike a comprehensive inspection, 4-points only assess the conditions of four major areas of the home. Insurance companies often require homeowners to get 4-points prior to receiving or renewing a homeowners insurance policy, as they use them to evaluate the financial risks of insuring the property.

Typically, we discourage inspectors from providing a warranty or life expectancy prediction. While identifying defects and determining systems’ and components’ conditions at the time of the inspection is within scope, providing a warranty or life expectancy prediction is not. In fact, the ASHI Standard of Practice specifically states inspectors aren’t required to pinpoint systems’ and components’ remaining life expectancy. (ASHI SOP 13.2.A.2.)

With 4-point inspections, however, you aren’t providing a warranty or life expectancy. As long as you have a separate, signed pre-inspection agreement outlining the limited scope of your 4-point, plus a separate letter or report documenting your 4-point findings, these inspections are considered very low risk.

2. Asking for the Inspection Report

Presumably, the client signed a pre-inspection agreement outlining the inspector’s scope, limitation of liability, and other claims-fighting provisions. But the homeowners insurance company asking for the inspection report did not. What if the insurance company finds fault with the report?

Avoid sending the inspection report to anyone who isn’t authorized to receive it. In this case, we instead encourage inspectors to send the insurance company a letter that’s separate from the client’s inspection report.

The letter could specify that the systems and components were in serviceable working order at the time of the inspection. Further, it should note that you aren’t making any warranties about the expected service life or future conditions of any systems or components. If you’re insured with us at InspectorPro, call your broker to get a state-specific letter designed for these scenarios.

In general, however, if anyone besides your paying client demands to see the inspection report, don’t send it to them. The original report belongs to the client. Even if you’re inspecting the same property for different clients, you need a new pre-inspection agreement and written report for every inspection. 

Takeaways

If an insurance company is asking for the inspection report after a 4-point inspection, what should you do?

Here’s what we recommend:

1. Sign a letter or send a separate 4-point report attesting to the serviceable working order of the systems and components you inspected. Mention your limited scope, and explain that you can’t make any representations or warranties for the expected service life or future condition of any system or component.
   If you’re insured with InspectorPro, get a copy of our insurance letters at no additional cost. Contact your broker or email weprotect@inspectorproinsurance.com for assistance.
2. Don’t send your inspection report to anyone but the clients who paid for it. And discourage them from sharing the report with others.
3. Do not sign documents asserting the current or future condition of systems or components.

Have more questions relating to managing risk? Your home inspector insurance provider is your best resource. Contact your broker or account manager for guidance on all your liability concerns.

– Your Friends in CYA

InspectorPro Insurance

Opinions or statements of authors are solely their own and do not necessarily represent the opinions or positions of ASHI, its agents, or editors. Always check with your local governmental agency and independently verify for accuracy, completeness, and reliability.