Insurance Concerns When Purchasing a New Home

Were you aware that your home’s claim history could affect its insurability? For example, if the house had water claims, that would be a red flag to any insurance agency. When purchasing a new home, it’s important to be aware of what factors may lead to insurance issues. Your coverage options should be your most important influence when making a home buying decision, according to the Insurance Information Institute (III).

Many home buyers are not aware that a home’s insurance value is based on the cost to rebuild the house, not the market value. Market values may still be down in many areas; however rebuilding costs are on the rise. If you are curious about your potential new home’s rebuilding cost, you can get an estimate at AccuCoverage.com, which asks questions about the size of the house and the building materials and details, then uses the same building-cost database that insurers use.

There are many factors that will impact your insurance, including the house location, the type of construction, and its condition. Home inspectors will also look at how old the house is. Older homes tend to have features such as plaster walls, ceiling moldings, wooden floors, etc. that will be more expensive to replace. In addition, the older the plumbing, heating, and electrical systems are, the more likely it is that fire or water damage will occur.

A few other insurance aspects for you to consider when purchasing a new home are the quality and closeness of the local fire department, your home’s disaster-resistance, and the location. In terms of location, it could cost you more to live near the coast or a river, or in a dense wildfire area. Lastly, you will need a separate policy if you live in an earthquake-prone or flood-prone area.

This information can be somewhat overwhelming for the first time home buyer, but an insurance professional can help you sort through the process of properly insuring your home.

GMG INSURANCE | By nms | Published September 13, 2013
Contact us at (855) 407-4450 or email at info@gmgins.com