Buying a home represents one of the biggest purchases that an individual can make. The decision should not be taken casually. Ultimately, an informed homebuyer is better equipped to make the right decision about a residence and whether this house will fulfill your personal needs. With the right information at your disposal, a homebuyer should have no trouble insuring his or her residence as well.
Home insurance likely is a requirement if you want to obtain a mortgage. However, there are various factors that may influence your ability to receive a favorable premium for your home insurance.
Factors that may impact your home insurance premium and/or your ability to insure your house include:
Home’s Location
Location represents an important consideration as you survey the housing market and will affect your home insurance premium.
Home insurance safeguards your house, personal property and more. Therefore, if you live in a region that is susceptible to hurricanes, wildfires or other risks, you may be forced to pay a higher premium to insure your house—or you may need to conduct a broad search to find an insurer for your residence.
Home Construction
How your home is built might affect your home insurance premium. In fact, if your house consists of older materials, you may need to update your residence so you can insure it.
In addition, many factors may impact the home insurance premium for an older residence, including:
- Outdated Wiring
- Galvanized Steel Pipes for Plumbing
- Storm-Sensitive Roof
Take a close look at a residence’s construction before you make your purchase decision. By doing so, you’ll be able to determine whether home updates are needed, along with how the home’s construction could affect your home insurance premium and/or your ability to insure the residence.
Replacement Costs
If you buy a home today, the value may change over the next month, year or decade. The real estate market fluctuates constantly, and as such, what your home is worth now is likely to change. As a result, using the price that you paid for your house to determine the costs to replace your residence is insufficient. You’ll need a professional home appraisal to determine what it would cost to replace your residence. After this appraisal is completed, you’ll be able to determine the proper home replacement costs and insure your house accordingly.
Flood Insurance
A standard home insurance policy does not cover the damage associated with floods. You will need flood insurance to supplement your home insurance if your house is located in a flood zone. It is important to note that your home does not necessarily need to be located in a flood zone to suffer damage due to a flood.
Even a few inches of water can cause long-lasting mold problems and flood damage in a home. If you purchase flood insurance – even if you’re outside of a flood zone – you’ll be protected if flooding occurs.
Conceivable Liability Exposure
Your home may have potential liability risks that can raise your home insurance premium or make it difficult for you to insure your residence.
Some of the most common potential liability threats include:
- Animals – If you own a large dog or other types of animals, you’ll need to account for each pet when you evaluate your home insurance options.
- Swimming Pool – A swimming pool is a must for many homebuyers, but a pool could impact your home insurance premium.
Think through your home insurance options in your pursuit for the perfect home, and you may be able to improve your chances of finding the ultimate house in no time.