Here we will cover some very important items that you should review when it comes to coverage of your new or existing home.
There are many considerations when looking into real estate, the appeal of the neighborhood, school district, property taxes, services, commute, and overall cost.
The most overlooked item is often the homeowner’s insurance. The financial implications of homeowner’s insurance are often misunderstood.
Some key items to be aware of are provided below. These items will influence your cost of coverage; in some cases, they can also be the deciding factor in your survival during an incident.
- Quality and Location of Emergency Services
- The farther you are from EMS and Fire services the more likely you or your family may suffer a financial loss as it relates to a home or illness emergency.
- Professional Fire services are often better able to handle fires than volunteer units however, access to either will be a deciding factor in calculating the risk borne by the insurer.
- Proximity to coastline
- Coastal areas will flood. You do not have to be a climate scientist or believe in global warming or climate change to see the damages and devastation caused by flooding.
- The frequency of flood events will increase and even homes that are inland may be susceptible to flash floods.
- Home age, construction quality, and condition
- The age of the home and the condition of the home can play a large factor in the rating by your insurer.
- Homes with major defects in construction or poorly maintained are often higher risks.
- Condition of the roof
- Without knowing the age of your roof, you may be looking for trouble and just because your insurer will cover you this year does not mean that they will still underwrite you at renewal.
- Flood Risk
- You should know your flood zone and a complete inspection that does not include your flood zone information is incomplete.
- You can find out more about flood insurance here.
- Swimming Pools or other special features.
- These special items are fun and creature comforts that most enjoy.
- They also carry significant liability concerns be cautious and carry enough insurance to protect your assets.
- A trampoline for example can lead to injury claims that are worth more than your home.
4 Point Inspections
Insurers may request these inspections prior to issuing coverage for a homebuyer or someone who may be looking to replace coverage.
Four-point inspections are often called for when insuring older homes.
In recent years, insurers have become increasingly reluctant to provide coverage on older homes.
Most insurance companies now require 4-point inspections for houses more than 40 years old or for rental properties older than 30 years of age.
The typical 4 Point Inspection consists of the four main components of a home which are.
- The HVAC System: The condition of the equipment is considered to be of high importance.
Some insurers can deny coverage on homes without central air conditioning and heating especially in areas where extreme weather changes are expected.
- The Electrical System: The inspection includes the panel, circuit, and type of wiring.
This also may include a review of GFI and the proper functioning of outlet grounds. Most home fires are a result of wiring problems.
- The Plumbing System: The overall condition of all visible pipes and the material from which they are made are part of a 4-point inspection.
Some pipes like those made from Polybutylene are prone to bursting.
Most insurers may not provide coverage for water damage there are some, which may cover some types for an added cost.
- The Roof. Some insurance companies will not insure a home if the roof is over 30 years old or has any damage.
Damaged roofs and water leaks are other common reasons for denying coverage by home insurers.
If your home has major defects in any of these four areas it may be in your best interest to make needed repairs and replacements before shopping for coverage.
These areas are potential sources of hazards or conditions that could result in future claims.
It is imperative that you conduct a 4 point inspection and provide the results to your agent when renewing your coverages or making changes.