Effects of Florida Four Point Inspection on Homeowners Insurance Market

Four Point Inspection

Florida has a history of more recent years of bad weather and in recent years has experienced hurricanes. In 1992, when Hurricane Andrew struck Florida, was in Florida Four Point Inspection born. It was introduced by the insurer for the owners to require the insurer provides insurance for the new owner. Insurance companies in Florida have tried to encourage owners to make their homes safer and reduce insurance claims. The four inspection points in Florida have been recognized as necessary, after the number of hurricanes. Insurance companies see the success of the program and it is spreading across the country. Reduced risk of losses on homeowners' insurance is the benefit to the insurer. Through this program, many insurance company losses a lot of money. 

In 2005, the Florida legislature for a law requiring all residential property insurers to file with the Office of Insurance Regulation a number of discounts that they intend to offer. Insurance companies issuing new homeowners insurance policies as of October 1, 2005 or the first renewal of an insurance policy owner to let policyholders know they can get a discount if they strengthen their homes against damage from the hurricane. All insurers are required to submit residential property discount new loss mitigation last March 1, 2007. After that date, insurers must include all new customers and renewal discounts that apply specifically to exact their homes. The main purpose of these inspections is to identify the construction features that reduce wind damage and loss. The Four Point Inspection is a key to evaluate your home condition on the four points. This will evaluate the capacity and strength of Roof, Electrical Conditions, the life years of expectancy of your HVAC (Heating Ventilating and Air Conditioning) unit, and the your plumbing system connections condition. The main points of this are to evaluate and report the condition and age of these elements. The insurance companies are expecting that these four elements are working properly as meant within the manufacturers’ specifications in order to avail the program.

 On the other hand, on the past years the four point inspection benefited both the insurer and the insurance company but in other point of view this program leads to loss of money of the insurance company. Since Florida has been known for having high homeowners insurance it is seen up to 50% reduction in some policies although there a lot of variables involved, each homeowner will have a different result, 20% to 40% are typical. The inspection costs around $100 but some companies charge as high as $150. The verification form is valid up to five years provided no material changes have been made to the structure. But today, government regulations that have already been implemented which allows homeowners to receive up to 50% discount on home insurance. Some of them also say that no matter how much a house is still, if a huge hurricane hits, there would still be their biggest problem. In short, the inspections do not guarantee complete protection and reduce costs for insurers. The implementation of these credits results to less profit of the company, which makes these companies lower. Indeed, in recent years the debate between the government and insurance companies in Florida made with premium discounts as a key issue. It is very evident that only the policy holders benefited this program but it hell for the insurers. On the other hand, fraud, inspector inexperience, and data entry are also rampant causing insurers become quite alarmed and frigid to issue discounts. To avoid any losses, insurance company are conducting re-inspection that is true and honest.

The four point inspection is to get the reputation of not only the state of Florida, but also in other countries of policyholders and insurance companies know the importance of inspection and allow it to scale. However, there are still some negative things about the discounts are still discussed and confirmed.