Insurance, in its simplest terms, is the transfer of risk from a policyholder, or insured, to an insurance company, or insurer. Insurance risk is defined as the possibility of loss. Loss, in this case, can be defined as an undesirable financial outcome. While there are other types of risk and other types of loss in life that are not strictly financial, in the insurance business, it all revolves around money. It revolves around money and the risk of losing it through an unexpected event such as a house fire, an automobile accident or a sudden death. Money is pledged by the insurer in response to a covered loss and money is pledged by the insured, in the form of premium, as payment to the insurer for its willingness to accept this transfer of risk.
Conducting a residential inspection for insurance purposes has two main goals. To ensure that the policy being written accurately reflects the cost of rebuilding the property in the event that it's destroyed in a catastrophic loss, and to discover any liabilities that represent a potential danger to the property or to people visiting the property.
As a property insurance company underwriter, your number one job is to accurately assess the amount of insurance risk represented by a prospective policyholder, utilizing a number of different tools. Typically, this process may include:
Property inspections have long been a painstaking and time-consuming process that's critical to the insurance risk assessments you make in conjunction with your policy underwriting activities. Fortunately, thanks to emerging inspection technology, property inspections have been changing significantly, becoming faster, better and less expensive to complete.
Insuring a commercial property requires significant activities in order to arrive at an accurate underwriting decision. An important part of this process is a quality commercial inspection by a firm such as Insurance Risk Services, with more than 35 years of excellence in residential and commercial inspection history.
As an insurance underwriter, you may require that a residential inspection be made as part of the process of issuing a homeowner's insurance policy. There are several types of home inspections, ranging from a basic exterior-only photo report to an in-depth interior/exterior inspection that looks at everything from the foundation to the roof, inside and out. This type also includes checking the surrounding property, including any exterior structures such as fences, sheds, pools, detached garages, etc.
Understanding insurance means understanding risk. As an insurer, your job is to accurately determine the level of insurance risk represented by each of your potential policyholders. The risk is the chance that something unexpected and harmful may occur to cause a financial loss covered by the policy. In property insurance, this may be the loss or damage of property or possessions or an incident that causes someone to become injured and which the policyholder may be held liable.
Building inspections performed as part of an insurance company's underwriting process are beneficial to both the insurer and the insured for several reasons. There are numerous levels and types of insurance inspections, from conducting basic level exterior photo reports to the highest value exterior/interior inspections. The most comprehensive inspections include interior and exterior photos and a detailed observation accompanied by detailed notes and diagrams, including replacement cost estimates. They also include a close analysis of the state of the heating/cooling, plumbing and electrical systems.
As a property insurance underwriter, you need certain information necessary to complete an accurate risk assessment for a property you're considering insuring. Obtaining this information will also provide an idea of a property's current condition and value.
There's an old saying that applies well to parents and other supervisors: “Don't expect what you don't inspect.” In the insurance business, a comprehensive property inspection is an important aspect of an accurate underwriting process for determining the viability and cost of a property insurance policy.