Common Risks Identified During Underwriting Field Inspections

Underwriting field inspectors arrive at their assigned properties with multiple goals in mind. Among those goals, they aim to build an in-depth, up-close picture of the site’s various risks. 

Ideally, their reports will compile information about structural conditions, site exposures, and occupancy details. Specifically, those that don’t always make it into an insurance carrier’s files through other means. 

Here's a look at the risk categories that come up most consistently across underwriting field inspections.

Occupancy & Use

The everyday use of a given property can be a tricky topic when it comes to insurance underwriting, and it can affect the risk level for carriers. How the use is presented in the application may not be the same as its general use. 

In other words, occupancy situations change, and risk levels change along with them. Common relevant findings include:

• Owners partially or fully renting out their property while still occupying the residence

• Businesses run out of a home that also have equipment, product or material inventory, and regular visitors

• A property listed on Airbnb or VRBO, but written as owner-occupied

• More occupants than reported, which can increase liability issues 

Each of these carries underwriting implications that a data pull alone won’t flag. 

Structural & System Conditions

This is where inspectors document the property’s physical conditions that tend to show up later as claims. A property can look fine on paper and tell a different story on site. These are factors that, when they’re working as they should, bring little risk. However, when they’re compromised, they are serious red flags for carriers. 

One example would be faulty or misused electrical panels, which can carry known safety and insurability concerns not totally visible in records. That may include double-tapping wires (two wires on a single breaker) or signs of greater issues like corrosion or burn marks, indicating that overheating or arcing has occurred. 

Another common example—perhaps more widely known by the general public—would be foundational issues. Those include cracking, settling, and water intrusion signs. Typically, you’ll find these in basements and crawl spaces, and they can heavily affect the coverage value of a home if not addressed. 

Site Conditions & Environmental Exposures

Satellite images naturally show properties from above. While some can give you a lot of great detail, they don’t necessarily show the more granular details. For instance, the way water moves across the lot or how close the tree line sits to the roofline. These require a closer look. 

Common site or environmental field inspection findings include: 

• Issues with grading or drainage that cause the flow of water to move toward the foundation/base of the home

• Overgrown vegetation or tree coverage, which could create wildfire or roof damage exposure

• Neighboring conditions that cause overlap or shared exposure, such as commercial work or adjacent buildings that are poorly maintained 

Unpermitted & Undisclosed Features

It’s not uncommon for properties to change over the years. Owners and contractors work to improve or update for equity or comfort reasons. Additions get built, structures get added. However, these things don’t automatically surface for carriers who need to stay up to date. 

Common examples of unpermitted or undisclosed features include: 

• Finished basements

• Garages converted to living spaces or businesses

• Detached buildings such as workshops or storage units

• Pool or spas

• Solar panels that weren’t disclosed upon installation

These features affect both replacement cost and liability exposure. When they're missing from the underwriting file, the policy isn't accurately reflecting what's on the lot. 

Getting the Full Picture With Signature Companies

Inspection oversights can compound quickly, putting carriers at risk of value gaps. The insurance entities that are best positioned to avoid them are the ones that utilize on-site field inspectors for underwriting needs. From initial pricing through claims handling, they’re better equipped at every stage. 

Signature Companies has conducted underwriting inspections for insurance carriers since 1993. We offer services for both standard residential and high-net-worth properties. Looking to learn more? Connect with our team today.