New Home Insurance for Home Buyers
Just got pre-approved for a home loan? Congratulations! That’s a huge step in life – and it takes you so much closer to living the American Dream!
Finding and buying a new home is as exciting as it is stressful: The purchase of a home is a huge undertaking that requires a good deal of forethought and research.
But once the fun part of finding your dream home begins, you’ll find yourself spending evenings and weekends driving about town with your real-estate agent, and wandering through what might become your home. And at night, you dream about paint colors and furniture arrangements…
When you find it, you know it. And then everything happens quite fast: Your agent might help you sign the paperwork, you put in an offer, and then you wait, chewing nails, to hear back whether it was accepted. “Hurry-up and Wait” is probably a good way to describe it.
Insurance may not be your first thought when you start thinking about buying a house. But don’t let it be your last! Our team at McClain Insurance can help you make this process as smooth and as stress-free as possible.
Once the home has been appraised you should start shopping for new home insurance.
We can help you find the right protection at the best rate for your new home.
Avoid unpleasant surprises by following this short checklist.
Here are a few house-buying tips to be aware of, from an insurance point of view:
- Choose your own insurance company.
- How far is the nearest fire station?
- Will your home insurance cover a trampoline?
- Part of a homeowner’s association? Check your association’s Master policy.
- House built before 1980? It might require retrofitting.
- Buying a home in a flood zone?
Choose Your Own Insurance Company
Your offer was accepted and now the real paperwork begins. Who would have thought that would be so many documents to produce, papers to sign, and questions to answer? When your broker assures you that she can take care of the rest, it’s easy to agree.
It’s a couple of months after you’ve moved in that you have the peace of mind to take a closer look at the papers… and discover that your homeowner’s insurance rates are high. Very high. To say the least.
Just like property taxes have become commonly rolled into an escrow account and made part of a mortgage payment, so have homeowner’s insurance payments. Every lender requires that you have homeowner’s insurance in place.
But that doesn’t mean that your mortgage company has to determine your insurance!
While the mortgage company is working on your loan, we can help determine the coverage you need and at a price, you can afford. Plus, with your permission, we’ll process everything so it’s ready when the closing date comes. Keep in mind that deadlines are always tight in the mortgage business so don’t wait.
How Far is the Nearest Fire Station?
You’ve always dreamed about a house in the woods. Kind of out there, away from all the hustle and bustle. And you found it, the perfect home, on a perfect 5-acre lot, not too far away… but far enough.
However, as you receive your homeowner’s insurance statement, you swallow hard. The house isn’t that big… actually, it’s about the same square footage as your previous house in the suburbs. So why did the rate increase?
The distance of the nearest fire station has an impact on your homeowner’s insurance rates. The further away the nearest fire station is located, the higher the rate. This makes sense, in a way: If heaven forbid, you ever had a fire, every second counts. With no fire department nearby, the risk for a major or total loss of your home is much higher.
And insurance companies charge for higher risk.
Will Your Home Insurance Cover a Trampoline?
Your new home is really great! Not only does it come with a big yard and a swing set, but it also comes with a trampoline! The kids would love it! Unfortunately, the backyard isn’t fenced, but … well … a fence could be added later, plus the row of trees provides some privacy.
This doesn’t sound bad at all, does it?
Unfortunately, from an insurance standpoint, it does. There are an estimated 3 million trampolines in US backyards, and injuries caused by trampolines are steadily on the rise, averaging over 240,000 medically treated injuries every year. Over 180,000 involve children aged 14 and younger.
That’s why it is very difficult to find insurance for a trampoline. If the trampoline is located on your property and somebody – invited or not – gets injured while using it, you will be held responsible for the damages.
That may mean many years of medical payments, or worse.
A trampoline is considered an “attractive nuisance”. Most insurance carriers have recognized the dangerous risk exposure that comes with a trampoline. Some carriers will not write a homeowner’s insurance policy for a home with a trampoline.
Others may write it only if the trampoline is inside a 6-foot fenced area with a self-locking gate.
Swimming pools are also considered “attractive nuisances” and are treated similarly.
Part of a Homeowner’s Association?
Check your Association’s Master Policy.
Living in a homeowner’s association can have its pros and its cons. But the fact is that more and more condo, town-home, and other communities are bound together by a Homeowner’s Association. For each homeowner, that usually means an annual fee.
What does the homeowner’s association have to do with your insurance?
Quite a bit, actually: From an insurance standpoint, if anybody got insured on the association’s joint property, such as, for example, a walkway or a playground, the association would be held liable.
That’s why each homeowner’s association has a Master policy in place. The question is: What does the Master policy cover?
Some Master policies don’t provide high enough protection, so if a loss occurs that exceeds the policy limits, each homeowner in the association will share an equal part in the liability. In that case, you may be required to pay a share of hundreds or even thousands of dollars.
If you don’t have the right protection on your homeowner’s insurance, that money would need to come out of your pocket. Luckily, your homeowner’s insurance can be adjusted to provide you with adequate protection.
Home Built Before 1980?
It Might Require Earthquake Retrofitting.
Isn’t there something charming about older homes? The craftsmanship, the history, the secrets in the attic… This one is a gem, with cherry wood crown molding and clawfoot tub… You could see yourself living here, one by one renovating and redecorating the old rooms and restoring its old charm.
On the West Coast, the danger of an earthquake is real. Consequently, in 1980, building codes changed to enforce earthquake-proof foundations. Unfortunately, many older homes don’t meet these requirements yet.
If you are looking to buy a home that was built before 1980, it might not have been retrofitted yet. Be prepared that your insurance company might require earthquake retrofitting before insuring it, or possibly deny coverage.
Visit this page for more information on Earthquake Insurance.
Buying a Home in a Flood Zone?
Isn’t the sound of water one of the most soothing? Whether it’s rainwater drumming on your window, waves crashing on the beach, or a stream babbling away… Not to mention the view. To look out the window over the expanse of a lake or riverbed is priceless.
A house near a beach or river is a dream for many. But if that dream home is located in a flood zone, your lender may require you to have Flood Insurance in addition to your standard homeowner’s insurance policy.
With recent weather patterns, Flood Insurance might be a smart idea, even if you live nowhere near a flood zone. Because certain water-related losses are excluded on a standard homeowner’s policy.
Now is the time to call us for your New Homeowners Insurance Policy. Because we represent a wide variety of insurance companies, you’ll have many options choose from. You can also get the process started online right here on our website.