How To Ensure You Can Afford Insurance Coverage For Your New House
Homeowner's insurance is one of the extra costs you should prepare for while buying a house. You may be able to afford the purchase price, but your big investment will be in jeopardy if you don't cater for these extra costs. Here are some of the precautions to ensure you can get and pay for your new home's coverage:
Get the Property's Claim History
When you buy a house, you inherit its claim history. If the property has a history of numerous claims, then insurers may evaluate it as a risky property and balk at insuring it. Even if they do, the rates are likely to be prohibitive.
This is not just a peculiarity of insurers; there are good reasons for this. For example, it is easy to assume that a house that has experienced a leaking roof, water damage, and mold growth has a water issue. Therefore, unless the insurer has a guarantee that the problem has been professionally dealt with, it will be wary of insuring the house.
Understand the Common Disasters in the Area
Homeowner's insurance doesn't cover every conceivable risk. Some disasters, such as flood, landslide, and earthquake may not be covered. Therefore, you need to research and identify the risks common in the area and confirm whether they are covered by standard homeowner's insurance. For example, you may need to buy earthquake insurance if the property lies on a fault line and the United States Geological Survey has identified the area as an earthquake zone. Since you will need additional coverage for risks excluded in standard coverage, you need to include their costs in your overall home insurance coverage.
Get the House Inspected
It's common practice to have a property inspected before purchase. This is necessary to confirm that there aren't any hidden damages in the house. After all, just because a home doesn't have a history of claims it doesn't mean that it has been trouble free for its entire history. A home might have hidden damages that the owner hasn't identified or those that the owner has attempted to fix on their own. However, such problems may create insurance headaches for you, so you need to know about them.
When doing all the above, it pays to be in constant communication with your insurance agent. The agent will educate you on how each factor is likely to affect the property's insurance. That way you will know whether or not you can insurance the house before buying it.
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