Many experts believe the housing market is getting ready to rebound — I hope they’re right! If you’re thinking about buying a home don’t forget to consider insurance. Would-be buyers often get pre-approved for mortgages, research school districts, and look at numerous houses before finding the “perfect” home for them. Often however, they don’t consider the insurance implications of buying a specific house. Insurance is not a one-time expense. If you have a mortgage it’s likely you will pay for insurance for the life of the mortgage, so keep insurance issues at the forefront of home-buying decisions.
Do some investigation
The following factors will typically impact the price and perhaps the availability of insurance for the home:
- Quality and location of the fire department
- Proximity to the coastline or floodplain and risk of flooding
- History of earthquakes
- Age of the home
- Condition of the roof
- Whether or not the home is well-built and up to code
- Swimming pool or other special features
Before you make an offer
- Get a CLUE —It’s important to learn about prior claims on the house — not that a prior claim is necessarily a barrier to securing insurance. In fact, sometimes it may be good news — for example, the roof was damaged by a wind storm and replaced with a new one. Ask the current owner for a copy of the insurance loss history report, such as a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report from ChoicePoint, or an A-PLUS report from ISO, a source of information about property/casualty insurance. A record of insurance claims on the house can provide answers to two important questions:
- Have there been any past problems in the home?
- If damage occurred, was it properly repaired?
Note: If the home has been claim free for 5 years there will not be a loss history report on the home.
- Get the house inspected — The inspector should:
- Check the general condition of the home.
- Look for water damage, termites and other types of infestation.
- Check the electrical system, water heater and septic tank, if there is one.
- Show you where potential problems might develop.
- Make certain that past problems have been properly repaired.
- Suggest upgrades or replacements that may be needed.
Call me, sooner rather than later
Don’t wait until the last minute to think about insurance. Call me to learn about different coverage options so you can be sure you know what you want and have an idea of the cost. Happy house hunting!
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