It's our policy

Hardly a week goes by without a customer asking if it's OK to send a copy of his home inspection report to his insurance company.

This is a new development. A person could get homeowner's insurance just by filling out a form or two. In the last year, though, insurance companies have been stung by 9/11 losses, huge toxic-mold verdicts, and the usual random mess of natural disasters and human screw-ups. It shouldn't surprise anybody that insurers have started asking questions about the properties they're insuring.

For years, insurance companies have been reluctant to insure any house that has knob-and-tube wiring. That makes sense, considering that the latest-and-greatest knob-and-tube wiring in this country is probably 50-years-old, or older. After 50 years, heat, humidity, and handymen take quite a toll on wiring. Most likely, the insulation's crumbly, and there are ugly bootleg splices all over the place. That adds up to bad wiring, which can shock people and cause fires.

In the last few weeks, we've heard reports of homeowners who were denied coverage because their houses have galvanized plumbing. This is odd, because the problem with galvanized plumbing is that it corrodes and causes a drop in water flow. The process takes decades. Bad water flow is an annoyance (can't rinse the shampoo out of your hair), but it's not something that an insurance company should worry about. Galvanized plumbing isn't particularly leak-prone, and it's not all old. It was commonly installed until the 1970s, and some people still install it.

So why are insurance companies afraid of galvanized plumbing? Best I can figure, galvanized plumbing allows insurers to identify older houses. Apparently, the people who assess risk for insurance companies think that old houses are inherently trouble-prone, so it's a good idea to avoid writing new policies on old houses.

None of these risk-assessment folk have asked me about this, but if they did, here's what I'd tell them: For the last several years, every truly screwed-up house I've seen has been brand spanking new, fresh out of the ground. It's the new houses that have the leaking roofs, the leaking walls, and whopping, big toxic mold colonies living off the leaks. It's the new houses that pass all their building-codes inspections, even though they don' t come close to conforming with the building codes. And it's the new-house owners who are lawyering up and making claims against their builders' insurance companies.

On the other hand, the old houses have taken the test of time, and most of them deserve an A or a B. In the average old house I see, the big problems have long since been identified, and fixed. If a 50-year-old house isn't falling apart today, it's not likely to fall apart any time soon.

All this is my way of saying: If I were buying a house, I think I'd buy an old one that has been well maintained. If I were insuring houses, I'd be more worried about paying claims on the new ones than on the old ones.

Now, back to the trend of home-inspection customers asking if they can send their home inspection reports to their insurance companies. The short answer is: Don't do it. It's bad for you, it's bad for the home inspector, and it's bad for the insurance company.

Here's why: With precious few exceptions, a home inspection report will include a list of defects, all of which need to be fixed. Once your insurance company sees the list, they will very likely want all of the defects-even minor ones-fixed before they write a policy. An inspection report will also include a description of materials and systems. If the house has synthetic stucco, or galvanized pipe, or polybutylene plumbing, or knob-and-tube wiring, you may not be able to get insurance on the house.

I know some of you are thinking, I'll just say I never got a home inspection, and claim ignorance. Well, that's not a good idea. Once you know about problems with a house, you can't just lie to your insurance company. That's a good way to pay premiums for years, then get a claim denied because you didn't disclose what you knew.

So what do you do if your insurance company asks for a copy of your home inspection report? Tell them the truth: The home inspection report doesn't belong to you. It belongs to the home inspection company, which is the author of the report. If your insurance company wants a copy, they'll have to negotiate that with the home inspection company, not you. If the insurance company doesn't want to do that, they can always hire a company to do an inspection just for them. If they're smart, that's exactly what they will do. If they don't want to do that, you might want to try another insurance company.