How To Inspect Your Home For Homeowner's Claims

How To Inspect Your Home

Inspecting your home is something that most people assume isn’t necessary because they think that they know everything about their home. So many times I have inspected someone’s home as a public adjuster and found damage, that they never knew about, and that if not taken care of, would have
lowered the value and integrity of their home. It ended up putting five to ten thousand dollars into their pockets. Before we go outside to find damage of any kind in your home, always keep with you the list of perils that cover your type of policy. This will help you know if any damage you find is covered by your policy. As stated at the end of the last chapter, an HO 03 policy is the best type to have.

To start, we need the right tools. The first tool is a good camera with a flash. A digital picture is better than film, in my opinion. You’ll need a flash light to see in spots where there is little or no light. If you have oil or gas heat or a fire place, you need a chemical sponge that you can buy at your local Home Depot in the paint department. Once you have your tools, if you can, have your spouse or friend do the inspection along with you. It can be a help because sometimes someone else has better eyesight than you.

Weather is one of the biggest causes of damage to a home. Since weather comes from the outside, you will need to go outside and walk around your home. Let me tell you a simple thing about what might be covered regarding water damage. If water enters your home above the ground, then it is covered. If it’s considered ground water or a flood, that’s not covered unless you have flood insurance or a sump pump endorsement . Here is one of the reasons it pays to know what kind of homeowner’s insurance you have. If it is an HO 01 or an HO 02 policy, you need to show an opening caused by wind where the water came in; but, if it is an HO 03 you don’t need an opening. Checking on the outside first will give us some possibility where we might find water damage in your home.

If you see cracks in the foundation, this is not covered because the insurance company considers this
settling. This would normally be called a collapse, but in most states, the insurance companies have
rewritten the policy to mean “bring to rubble.” Bring to rubble means that a part of the foundation has broken into pieces, not simply a crack. This could also apply to any other part of the structure if it has
broken into pieces, such as a piece of your ceiling falling out.

Next, we want to check the roof for any shingles, slate, or tiles that may have come off from wind or weather. Always look for where water could come into the home. If you see a dip in the roof, it could mean that one or more of the rafters are cracked or that you have water damage to the sheathing. Sheathing is the plywood surface underneath your shingles. This could be from heavy snow loads on the roof.

Always understand that the damage has to be sudden and accidental. But understand that rot is not
covered and normal water damage is not rot. Rot is a repeating event, when water damage occurs over and over again without being repaired.

Now you should look under any soffit. That’s the part were your roof hangs over the outside walls of your home. In the winter you might have what is called ice damming. When you don’t have ventilated soffits or roof rafters keeping the under side of the roof cold the build up of heat will melt the snow in the day and refreeze it at night, making what we call an ice damming affect. This moves the shingle upwards and causes ice to form up under the shingle. When we have warmer weather, it melts the ice and water just streams right into your home. You might not see damage on the roof when ice damming happens, but you will see water inside your house. Ice damming is only covered under an HO 03 policy. The next time you have a new roof put on, have your roofer put a ice shield under the lower shingles to avoid having this as a claim.

Now, look at windows and siding for any damage. Siding can be damaged differently depending on what it’s made of. Aluminum dents and vinyl breaks. Mold or mulch spoors which look like little black dots that you find on your siding are usually not covered anymore.

On the back of the house we could find two different kinds of claims. As Americans we tend to think that if we put our grills next to the house that it is safer. So, we put our grills next to the siding, not thinking that the grill heats up to about 800 to 900 degrees and will melt the siding. If that happens, this is a claim with an HO 3 policy. The other type of claim comes from basic maintenance of our decks. We tend to overspray or brush the deck with oil based stain or sealant. To determine if the stain on aluminum or vinyl siding will come off, use a little cooking oil on a clean rag. Wipe the siding. If it smears, this will show you that the stain is made with an oil base. It will just continue to smear and you will probably need to have a good part of the siding replaced. If when you wipe it with the rag and it comes off on the rag, it probably is a water based stain. Power washing usually will clean off the stain and you have no claim.

If you see vandalism like dried egg on your siding this is not going to come off and will need to be
replaced. This is a claim. While we are still outside, check for any places that might allow air to leak into your home, such as windows and doors that have cracks in their caulking. You should re-caulk them to prevent water entering your home. Wherever air comes in, water can also comes in. Simple maintenance can prevent further damage to your home.

What happens if you see damage to your property that came from your neighbor’s property such as a tree falling or fire or such? Why would you want to take your neighbor to court or take money out of his/her pocket? You should go to your insurance company and have them pay for your repairs and let the insurance company go after your neighbor’s insurance company. It will help keep a friendly
relationship with your neighbor and will not add any cost or concern to your neighbor and his/her
insurance will not go up. As well, if you had a contractor make a mistake, you don’t pay money to an attorney to have it fixed. Use your policy and your insurance company to get their money from the contractor. This is called subrogation. You are giving the insurance company your right to recover any money for a loss that someone else caused.

Let’s go inside and upstairs. But first if you need a ladder to get into your attic, this would be the time to go get it. Be careful! This is one area that can be dangerous if all you have is open ceiling joists and
rafters. You could fall through and hurt yourself and do damage to your ceiling. It would be covered. We are looking for cracked rafters or damage done to any sheathing on the roof. With the rafters, you will find that they crack in the middle because of the weight of snow or ice on your roof. We are also looking at the sheathing and insulation to seeing if we can find water stains on the sheathing.

If you are looking during warm weather thinking that it’s too late to claim the damage, not so! You can claim it at any time, but you can only sue the insurance company up to a year after the damage has been reported to the insurance company. What this means is that you have one year from the day you discovered the damage to sue the insurance company if they do not pay for the damage. Because the
insurance company has created a state of ignorance by not explaining with the policy holders what is covered, and how and when to file a claim, the day that you notice damage becomes the date of discovery. A lot of people will say, “I don’t know when it happened!” That’s all right! The day you find the damage is known as the date of discovery.


Another concern with having a claim is, will it be big enough to submit? I have laid out a few ways that will guide you through the process. You will find it in the scope and estimating chapter.

After coming down out of the attic, find the first bedroom to your left to start in. As you go into the room go from the left to the right. If you always do it the same way with each room, you will find that you will not miss anything. Always check under the window sills and on the ceiling looking for water stains. A stain can be light so use your flash light. Remember that just because you don’t see a lot of damage on the walls or ceiling doesn't mean that it’s not a good claim. Your insulation may be shot because of the water and you may find other challenges. In many rooms you will see cracks over the door frames. This is from settling which is not covered under collapse in your policy.

Kid’s rooms seem to always have stains on the carpet or marks on the walls with crayons- that’s
covered. If your children damage your home or their friends it’s covered.

If you have blown in hot air heat from oil or gas, check your vents for dark or gray stains or look on the walls and ceiling to see if you can see outlines of joists or studs or black spider webs. Remember that chemical sponges I told you about, well, this is when you use it. Take the sponge and make a
single swipe of the sponge. Look where you swiped the sponge. If you see a gray outline on the wall or vent then you have a puff back. A puff back is when an oil or gas furnace has a backfire and shoots soot into the air. Puff backs are always large claims on all policies.

Some homes have air conditioners in the windows. You can find that the condensation from the air
conditioner will damage the wall and window sill. An accidental discharge of water from this is a claim. Some homes have the air conditioner condenser unit installed up in the attic. If the condensation drains are clogged, then the pans fill up and overflow and water destroys the ceiling below and
insulation in the attic. This is a claim on HO 02 and 03 policies and are called accidental discharge of water when making a claim.

Now let’s check out an up stairs bathroom. Bathrooms are the beginning of many claims with a simple
understanding that pipes break. First you need to also know that the plumbing or fixing of the pipe is not covered, but that the damage and the access to the plumbing is covered. Usually, most of the time the access is more expensive than the fixing of the pipe. You will sometimes find that there is an access panel to access the part of the plumbing that needs repair. Many times the access point will be a tile wall, floor or removing the tub or fixture and replacing them. Toilets, tubs and sinks seem to be overflowing all the time. When inspecting the bathroom open up the vanity doors and take a sniff, if you smell mustiness then you have a leak and you should inspect further. Many times in showers you will find that the shower pan under the tile is leaking. Toilets overflow and the water will seep under the toilet and hit the ceiling below.

Check out every room in your home on the upper floors. As you go down a floor, remember to look under any room that has a bathroom above it for damage. Now, let’s go downstairs to the first floor and check every room like you did upstairs. Don’t forget to inspect the kitchen and bathroom. If you have a cracked tile on the floor or wall, as long as it is not cracked because of settling, it is covered on HO 03 policies only. Burns on your counters are covered on HO 03 policies as well as any burns on your cabinets near your stove. Dishwashers seem to have spills all the time. If the door leaks and water damages the floor below, it is an accidental discharge of water and it is covered on HO 02 and 03
policies and can be submitted for a claim.

Now lets go to the laundry room. So many times if you still have those rubber hoses on your washer
without stainless steel mesh, the hose leaks and if you’re not home, can flood everything in its path.
Sometimes the washer tank leaks which could be as much as 50 gallons. This again, is an accidental
discharge of water and is covered by HO 02 and HO 03 policies.

Many homes have fireplaces. If smoke has filled the home because the flue wasn’t opened, this is also a puff back and is covered on all policies. This can cost a lot of money to clean all the walls, ceilings, as well as floors, lights and furniture.

If you live in a home that is built on a slab of concrete, all your pipes go under the slab somewhere. If they break or are leaking, then your floor will need to be opened up. You may suspect this has
happened when you notice a backup in your sewage system or gray water or moisture coming up from your floor. Check for this if you see changes in your flooring in anyway. The fixing of the pipe is not covered, but the damage ensued from access to the pipe and damage from the leakage is covered. This coverage is called access. You could have the same kind of damage out in your yard, due to a breakage of a sewer pipe, but it may or may not be covered, as many insurance companies are limiting the breakage to no more than 3 feet from the outside wall of your home.

Now let’s go into the basement where you may have ground water that always comes into your
basement, But since you don’t have flood insurance, you think you’re stuck with the mess. Not so! All you need to do is call your agent and tell him/her that you would like to have a sump pump
endorsement put on your policy. The endorsement should cover for 10% of the Section A Building amount listed on the Declaration page . For example, if the amount was $400,000 for the Section A Building amount, you could receive 10 % of that or $40,000 to fix your basement with the sump pump endorsement. It will cover any damage to a finished basement or stored stuff and heaters. It only costs about $40 to $50 a year. If you already have damage you can not claim it now. Fix any damage that has occurred, then get the sump pump endorsement to safeguard you in the future.

I recommend that you inspect your home every six months. If you have found a claim in your home, go to the next chapter. Pass this information along or buy a book for one of your family members or friends. You’ll be helping them to find claims, just like you did!

The Top 10 Stupid Reasons Realtors Do Not Like FHA Loans

1. The FHA loan has became popular once again over the past 6 months mainly due to it being one of the only 100% financing loans able to use to buy a home. With all of the major mortgage companies going bankrupt around the country they all lost their ability to use their own loans. What I mean by using their own loans is that many companies, let’s say Quicken Loan for example worked with larger banks and investment firms and they wrote their own guidelines. This means that they made their own rules and as long as a bunch of underwriting guidelines were met than the loan could be written and sold on the secondary market for a profit.
FHA have always been a group of masters in knowing what makes human changes that show reality in commitment. Three little words “Utmost Good Faith” show the meaning of a persons understanding of long term commitment. Having people put out the effort to complete a one year of handling bad debt. In a positive manor for one year, brilliant making people complete their pledge in tangible way.
2. Realtors loved this during the days of the reify/purchase boom. Since the mortgage companies had their own guidelines a person looking to buy a home could buy just about anything they wanted as long as it had four walls and a roof. It was up to the person buying the home to make sure that the house was up to par with a home inspection.
FHA new that first time home buyers are experienced in home safety and preparedness. It’s that passionate conservative that gives helpful information and guidance for protecting that first time home buyer. Isn’t that what realtors are suppose to do?
3. The mortgage companies did have some standards (have to give them some credit). They would not allow you to buy a home that did not have any type of flooring covering the sub floor. This means that the whole house had to be carpeted, tiled, or wood floors down to cover the sub floor. The kitchen had to be complete. You could be missing a dishwasher or a fridge but the sink had to be in. The mortgage companies would find out when the appraisal got back because in the report it would state what is missing and there would be pictures on it too.
Too many companies knew they were only getting a drive by appraisal and didn’t say anything. Even I can take a picture of any kitchen, but is it the kitchen. Appraisers are not kept to the same standards as an FHA inspection.
4. Now when the FHA is the only option out there for people to get approved on a loan some new standards have been imposed. The FHA’s main guideline is that a home inspection must be done on top of an appraisal. An appraisal and a home inspection are two different things. An appraisal looks at the features of the homes compared to the other homes like it in the neighborhood and determines a value (even if it is missing flooring). A home inspection looks for things like leaky pipes, bad foundation, broken windows, bad roof, mold, and others.
It’s my belief that every home should have an inspection for insurance claims that maybe charged to the insurance company for damage not reported, because of the noncompliance of the insurance company’s responsibilities to the homeowner in explaining their policy’s value to the homeowner. This is a violation of law in every state in the union.
5. If the home that the buyers put an offer on fails the home inspection than the loan cannot be closed until all of those things that made it fail the inspection are cleared up. At that time the loan can close. In reality though, how many people are going to go and dig into whatever space they might have on their home equity line of credit just to fix up the house to be able to sell it to you in a couple months after all of the repairs are fixed. What they are going to do is wait until somebody else comes around that is approved on a conventional 30 year fixed rate mortgage that does not need to pass a home inspection to sell the home. More than likely the people trying to sell the home are probably upside down on their home anyways and can’t afford to put any money into it because then they will need to bring money to closing. If somebody does not come to them with a normal conventional loan they will probably have to foreclose on the house.
The lack of understanding homeowners insurance is ramped in America today. It affects hundreds of thousands of homeowners in protecting the integrity of their home. The mortgage company made you purchase insurance to protect their investment. Since the Insurance commissioner is not going to do their job in protecting the homeowner. Maybe the mortgage company could explain the policy and how to use it to protect the integrity of the investment to the homeowner.
6. With the home not passing the inspection you already know what the look on your realtors face is going to look like. It’s going to be one of disbelief and anger at the same time. Since realtors get paid on commission they just wasted a bunch of time on a deal that has a 95% chance of not closing now. The realtor can either keep looking with you for new homes or just bail on you completely. In this real estate market you might get lucky and find somebody who will stick with you because the realtor is not closing a lot of deals right now because not that many people are getting approved on mortgages at all.
Or find a public adjuster that will do a home inspection for insurance so the monies needed to bring the home to pre-loss condition are made available to the homeowner to complete the work. If a public adjuster is not in your area having a realty firm sending one of their realtors or a employee to the only public adjusting school in America would do two things. First it would solve the immediate problem and show good faith with their client’s, second it would bring in large sums of cash flow into the realtor firm maybe even doubling the firms income.
7. The FHA requires all borrowers to escrow their property taxes and homeowners insurance with their mortgage payment. This means that they now have to bring more money to the closing table to suffice what they need. In total they need money for escrow, down payment, and closing costs. More than likely the person looking to buy a home does not have this kind of money in a bank account any where so this becomes a lost cause.
More realtors should think like farmers. A farmer prepares the ground the year before so his crops will yield a plentiful crop the next year. I use to help client’s to prepare for their purchase of a home the year before for credit and down payment in helping them put together a plan. Now since I controlled the paper work I also made sure the client purchased their loan from us. This also had a great byproduct of referrals, I believe the life blood of a good realtor.
8. FHA loans require twice as much paperwork to complete a loan than a normal loan. With all of this paperwork mandated by the FHA there always seems to be something that pops up and deters the loan from closing. This alone can drive a realtor crazy because all they want to do is show you a house that you like and close the deal so they can move on to the next client.
The richest people in the world have found a niche in business and they then did it over and over again to the point that they controlled and refined a consistent market place. I believe realtors have the ability to use continuing education in our high schools as the ferial fields to find their clients without any cost to them. The realtor starts prepping their crop of new home buyers using FHA to control the client, sounds like a plan to me. Email me for additional information mhouser@thecompletementor.com .
9. If you are in the market to buy a home and are using a pre-approval from a mortgage company using a FHA loan you better get a move on. FHA is implementing new guidelines that gets rid of all down payment assistance programs and requires borrowers to come to the table with 3.5% down payment now. If you want to get into a house and can only get approved on FHA you better start hustling because it takes most mortgage companies 3 weeks to close a loan and about 4 weeks to close an FHA loan due to its lengthy paperwork.
People don’t care about their credit rating until they want to buy a home. If it wasn’t for FHA many people would not have the chance to own a home and start their futures with a helping hand not a hand out.
10. If you want to see your realtor make a funny face just say the words “FHA” to them. You will probably be asked if this was your only loan that you could get approved on. Do not be insulted because of it, the realtor is just trying to cover their butt and not waste a lot of time showing you houses that you will never be able to close on. With so many quirky guidelines you can see why the FHA does this. To really see why they are so stringent you need to step into their shoes. Why would I want to lend you money on something that is not even up to code? If I lent you the money and you defaulted on the home than all I (the FHA) would own is home that is broken down, beat up, and probably needs thousands of dollars to bring it up to code to hopefully sell it. I guess we can thank the U.S Government for doing at least one thing right and making sure we are not buying run down houses. Be sure your realtor is a strong FHA realtor if not find another realtor trust me they are out their. Ask your FHA loan officer for the realtors that are.