Purchasing a home can be exciting and for most of us, is the largest single asset purchase we will make. Being confident it can be properly protected is essential. This starts with being aware of what to look for, from an insurance perspective, before you purchase to help avoid possible issues and unpleasant surprises.
There are a number of factors that may impact overages especially when buying an older home. Many of these can be identified by hiring your own home inspector before you make an offer to purchase, rather than rely on an inspection report the seller may provide. When possible, hire an inspector who is experience in doing surveys in the area where you are buying and can help you identify risks and potential problems.
If purchasing an older home you will want to make sure the follow key areas have been updated:
•Wiring: The majority of insurance companies do not accept homes with, knob and tube, aluminum wiring or 60 AMP service. While 200 AMP service is preferred, make sure your property has at least 100 AMP service.
•Roof: Did you know that purchasing a 15 year roof doesn’t necessarily mean it will last 15 years? Insurance companies look for a roof that is in good condition. They may recommend replacement or repairs if they have concerns.
•Plumbing: The majority of insurance companies do not provide coverage for homes with galvanized plumbing. Cast iron waste pipes may also be a concern due to oxidization.
•Heating: Most insurance companies require the furnace to be updated every 20 years. Oil tanks have caused extensive and costly claims for insurance companies. If you plan to purchase a home with an oil tank, it is best to contact a broker to discuss coverage options in advance.
Water damage issues are becoming more prevalent as we experience more extreme weather conditions. Do your research. Determine if there have been sewer back-up issues in the neighbourhood where you are purchasing. If so, what protection exists to avoid or minimize water damage? Does the home have a properly installed sump pump and a back check valve? If there is evidence that there has been prior water damage in the home be sure to have your inspector check for mould which can present a significant health hazard.
If purchasing a home with solar or geothermal heating, contact your broker to discuss options. Some insurance companies now cover the unique requirements associated with alternate heat sources.
Title insurance should also be considered in order protect yourself from unknown title issues that prevent you from having clear ownership of the property.
Make your home purchase a positive one by being an informed buyer. By keeping these things in mind before your purchase, you will be able to focus on enjoying your new home. Remember we are always there to provide advice along the way…and attend your house-warming party!