How Insurance Affects Buying a Home
Many elements can delay selling or buying a home. No matter which end of the deal you're on, there are important factors to take into consideration and certain steps that you should be sure to take well in advance.
Location, Location, Location.
Home insurance premiums can be small or large, and a huge factor in this is the home's location. Companies use a rating scale from one to ten to estimate how well-protected the area is from potential fire damage.
The lower the number, the closer you are to a hydrant or fire station. As that number inches higher, you will see it reflected in the home insurance cost. In rural areas, it is important to ensure you are with an Independent Insurance Agent – they will have a wider variety of insurance companies available with which to write these types of higher fire danger home insurance policies.
Age of Fixtures and Home
How old is the home? If it’s over twenty years old, most insurance companies require updates. Including things like:
- Plumbing: Update from galvanized plumbing to copper pipes or PVC.
- Electricity: Fuse boxes are dangerous, and should ideally be replaced with circuit breakers.
- Heating System: Most furnaces over twenty-five years old need to be updated or replaced.
Roof
If the roof is older than fifteen to twenty years old, you may need to have it repaired or replaced.
Heating Methods
Due to the danger of fire, most companies are strict about the types of heating sources they will allow. Most also have requirements, such as factory installation, and annual cleaning. They may also result in a higher home insurance quote.
Ask yourself....
- Is it time to replace the old heating method with a new one?
- Will the benefit to the new owner and increase in sticker price outweigh the cost of installation?
- Be sure to ask yourself – and a professional – these questions.
To avoid problems with home insurance later down the line, make sure all the proper inspections have been carried out before closing on the property.
Prior Damage to Home
Don’t let the sale or purchase of your home be hampered by technicalities. Ensure that your home insurance agent runs a CLUE (insurance history) report on the home to double-check any claims history. Be certain that all the repairs are made as soon as possible, so there are no delays in binding home insurance on the property.
Any Prior Claims
Have you had more than one claim in the last 5 years? Buying a home could be delayed by insurance.
- Claims linked to weather are given more slack.
- Claims related to fire, theft and water damage are carefully inspected.
- Certain companies will non-renew your insurance policy when you are looking to purchase a new home, due to your claims history.
The best advice? Keep your nose clean, and your insurance claims history out of hot water.
Four-Legged Friends
If you own a dog and plan on buying a home, depending on what breed of dog it is, you may find sticking points with your insurance company. This is especially true if your dog is considered vicious (Rottweilers, Pit Bulls, Doberman Pinschers), or has a history of biting. Be sure you ask your insurance agent about home insurance rules if you have a dog.
Some examples of unacceptable dog breeds:
- Akita
- Alaskan Malamute
- American Staffordshire Terrier
- Bullmastiff
- Chow Chow
- Doberman Pinscher
- Great Dane
- Pit Bull
- Presa Canario
- Rottweiler
- Siberian Husky
- Staffordshire Bull Terrier
- Wolf Hybrid
- Or any mix of these breeds
Swimming Pools & Trampolines
Trampolines and Pools are seen as an “attractive nuisance” by home insurance companies, meaning that they attract liability exposure to the property (such as your neighborhood’s children). If a child gets on to your property to play on the trampoline when you’re not home and they get hurt, you are still responsible for them.
Certain home insurance companies are more relaxed on trampolines and pools, though they do tend to come with stipulations, such as pools having fences, no diving board or a minimum depth if there is one, and no children left to swim unsupervised.
Insurance Score
Virtually, nearly all home insurance companies now use an insured’s insurance score when setting up a home insurance quote or auto insurance quote.
It is necessary to understand that an insurance score is in place to help foresee future losses by an individual and a credit score is used to predict future delinquencies on credit accounts by an individual.
Attributes used in an insurance score include:
- Payment history
- Collections
- Bankruptcies
- Outstanding debt
- Length of credit history
- New applications for credit
- Types of credit in use
Some insurance scores also use information collected from other insurance companies such as premium payment history and length of time with their prior insurance company. Though a clients credit score could be high enough to close the loan, their insurance score could significantly enhance their premium and possibly put them above their payment threshold, holding up the closing process.
Texas Home Insurance Agent
Your time is important, and so it's vital you have all the documents ready well before the closing date. So, you need a home insurance agent that is fast and responsive.
Working with an Independent Insurance Agent is by far the smartest choice – they have many home insurance companies to choose from, and can pick one that they know can get home insurance quotes and binders done promptly.
Contact us today for more information or for a free home insurance quote.