Insurance Implications When Purchasing a New Home

For SaleWhen your clients are trying to choose their dream home, they usually have a list of what they want that goes beyond the size of the house. Factors such as location, property taxes, school district, and available recreational opportunities in the neighborhood are just a few of the things that may be important to them.

One important and often overlooked consideration is the insurance implication of purchasing a new home. The premium for homeowner’s insurance can very greatly. Here are a few important points that could make a significant difference in the rates and choice of insurance companies.

Credit Rating – A good credit history helps in many ways. Good credit makes it easier to get a mortgage at a competitive rate, and it may also help with the insurance rate. We suggest that your potential buyer get a copy of their credit report to check it for accuracy and report any mistakes at the front end of the purchase cycle.

Type of Home – The physical characteristics of the house, such as the size, location, construction and overall condition can affect the cost, choice and availability of home insurance.

Location of the Fire Department – Houses that are located near highly-rated, permanently staffed fire departments usually cost less to insure. This also holds true for homes that have a hydrant nearby.

Proximity to the Coastline – Houses located on or near the coast will generally cost more to insure than those further inland. There will also likely be a separate hurricane or windstorm deductible. This is usually a percentage deductible based on the cost to rebuild a home, rather than a flat dollar amount.

Age of the Home – A stately, older home can be quite beautiful, but ornate features such as plaster walls, ceiling molding and wooden floors may be costly to replace and raise the cost of insurance. Plumbing, electrical systems, and the roof can become unsafe with age and lack of maintenance. Older homes may cost more to insure, so be sure your client informs his insurance agent of any upgrades (especially to the roof, heating, plumbing, and electrical wiring).

Risk of Flooding – Damage from flooding is NOT covered by standard home insurance policies, so if the home is at risk from flooding, your client will need to purchase flood insurance.

Swimming Pool – If the house has a swimming pool, hot tub or other special feature, your client will likely need more liability insurance. They will also want to consider purchasing an umbrella liability policy to provide added protection in the event someone is injured on the property.

Call Ginger Carlon at 400-3530 for more on your personal and business insurance needs or email her at

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