Buying a New Home? Consider These Insurance Factors
With home prices continuing to be competitive and interest rates low, many people are dipping their toes into the real estate market. Regardless of whether you are a first time home buyer, considering the purchase of a second home or an empty nester looking for a cozy smaller property, it is important to factor in the potential insurance costs of the home you are considering when calculating the overall price of owning the house, according to the Insurance Information Institute (I.I.I.).
When looking at prospective new homes, the I.I.I. suggests asking the following questions:
- How far is the home from the fire department? Houses that are near a fire station with professional firefighters usually cost less to insure.
- What is the condition of the plumbing and electrical systems? Poorly maintained, unsafe and/or outdated systems can cost more to insure.
- Is the home vulnerable to wind damage? Find out if private insurance is available, or a state-run insurance program. Is there a windstorm deductible, and how high is it? A home on or near the beach may be more costly to insure than one inland.
- Is the house at risk from flooding? Flood insurance is not covered under a standard homeowners insurance policy. However, it is available from the National Flood Insurance Program, which is serviced by private carriers, and from a few specialty insurers.
- What about earthquake risk? Earthquake insurance requires an endorsement or a separate policy.
- Is the house well built and well maintained? Homes built by reputable builders using disaster resistant materials and designed to meet current building codes are likely to better withstand natural disasters.
Source: Insurance Information Institute (iii.org)