If so, it’s a very exciting time — and you’re not alone. With home prices competitive and interest rates low, many people are considering the real estate market. Maybe you’re a first-time home buyer, or looking to purchase a second home. Perhaps you’re an empty nester looking for a cozy smaller property.
As you look at potential properties and start to calculate the overall price of ownership, it’s important to factor in the potential insurance costs. “When people look at homes, they tend to focus on factors such as property taxes, neighborhoods, school districts, and available recreational and cultural opportunities,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the Insurance Information Institute (I.I.I.). Insurance is an often overlooked item.
What to ask When looking at prospective new homes, the I.I.I. suggests asking the following questions:
How far is the home from the fire department? Properties located near professional, permanently staffed fire departments generally cost less to insure.
What is the condition of the plumbing and electrical systems? Age and lack of appropriate maintenance can affect the safety of plumbing and electrical systems so older homes may cost more to insure.
Is the home vulnerable to wind damage, earthquake, flooding? Properties vulnerable to wind, flood or earthquake damage will generally cost more to insure and may require separate policies to provide specific coverage.
Is the house well-built and well-maintained? Consider hiring a licensed home inspector to determine the general condition of the property. Routine maintenance will be your responsibility as a homeowner.
Check loss/claims history report. Ask the current owner for a copy of an 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 leading source of information about property/casualty insurance. This will provide you with a record of insurance claims for the last five years and can give you some insight with regard to past problems in the home and whether previous damage, if any, was properly repaired.
Where to get informationThe I.I.I. has created a Home Buyers Insurance Checklist. Find out what to do before you buy a house and the factors to consider when looking at homes and placing a bid. Along with a knowledgeable home inspector, I can be helpful in answering some of your questions and providing information so that you can decide how to insure your new home. Don’t wait until the last minute to think about insurance.
