Buying a house is an exciting venture that marks a milestone in the home buyer's life. But the home-buying process can also be stressful, especially for less experienced buyers attempting to enter the housing market. That's because there's so much to navigate, from finding the perfect property and getting it financed to ensuring you can get the home insurance coverage you need for your new house and the land that goes along with it.
Some people don't worry too much about the insurance component because they assume they'll be able to get the right home insurance coverage and premiums regardless of which house they choose, but that's not necessarily the case. Suppose the home is considerably older and not updated or has other issues that increase the risk of catastrophes such as fire or flooding. In that case, it can seriously impact the type of coverage available and the cost of your premiums. Some insurance carriers will decline the house outright, and others will limit the types of coverage they're willing to offer you.
That's why it's so important to know what you should ask your realtor when shopping for a house to ensure you are buying a property in a safe condition and rest assured that your final choice is insurable. Our reliable Morison Insurance brokers have outlined some essential questions below that are a good starting point when shopping for a house. Still, there may be other factors that influence the overall process as well.
When you're shopping for a house, and you've found one that seems like it may be the right match for your family, stop and take the time to discuss it with your broker at Morison Insurance before signing on the dotted line. This is important so we can ensure you have all the information your insurance company will require to cover you with the right home insurance.
This is the first question you should ask and also one of the most important. The year built is often included on the real estate listing. Even if it is, you should verbally confirm it with your realtor to ensure the listing is accurate. The year the house was built matters because if the building is more than 15 years old, the risk of damage, deterioration and other problems that will prompt you to file a claim is increased. That means your risk assessment will be higher, and your premium will be priced higher.
That being said, there's nothing inherently wrong with looking at older homes when shopping for a house. There are many charming older homes out there that are in great shape and completely insurable—but if you are seriously considering a house over 15 years old, it's critically important to find out more about how it has been updated, which leads to our next question.
When shopping for a house, even one built within the last 15 years, it's essential to ask your realtor about the updates done over the property's history. Maybe you love the look and history of beautiful, older homes that have been lovingly maintained over the years. There's nothing wrong with that—as long as specific components have been adequately updated.
From an insurance provider's perspective on home improvements and updates, the four most critical areas are plumbing, electrical, heating and the roof, for a good reason. Water damage and fire are the two most significant threats to any house and the contents inside. Suppose you're shopping for a home and fall in love with one with old, outdated plumbing, heating and electrical systems or an old roof in poor condition. In that case, the risk of fire and water damage dramatically increases, and insurance carriers' chances of being willing to take on that risk decrease.
Consider the electrical, for example—if your dream house still has an old system with knob and tube wiring, there's a much greater chance of an electrical fire that could cause severe damage to the house, and that will likely prompt insurance companies to decline coverage until it has been updated to a modern, safer system. You may be willing to manage those updates after buying a house and moving in, but it's good to know what you're getting yourself into in advance.
After discovering which parts of the property have been updated, the follow-up question to ask your realtor when shopping for a house is when the updates were carried out. Components such as furnaces and plumbing lines don't last forever, so even if they were recently updated, they could be well past their prime by now. If the plumbing system's wastewater disposal lines were last updated 50 years ago, for example, they're due (or possibly overdue) for a replacement. Other components can have a much shorter "life expectancy," and if they have passed a certain age, insurance companies will consider them a liability. Even if they are not too old when shopping for a house, they may expire within a couple of years, and your insurance will not cover them past that time. If you have the information about when updates last took place, you'll know exactly when you need to get them updated again.
When shopping for a house, whether it has been updated or not, you need to find out what materials are used for those four important components we mentioned above: heating, plumbing, electrical and the roof. Your realtor is obligated to disclose some information, such as the presence of asbestos. Still, they do not necessarily have to alert potential buyers to all the materials that may influence the property's risk assessment.
But perhaps even more importantly, your insurance provider will want to know regardless of the answer. Suppose you don't know what the plumbing pipes are made of, for example. In that case, the insurance company is forced to assume it's a high-risk material, increasing your homeowner's insurance premiums or even potentially preventing you from closing on the property. There's no point in going through that hassle when in all likelihood, the pipes are an acceptable material that does not warrant a high-risk designation. That's why you need to find out about the materials used for the major systems in the house, such as plumbing.
As you're viewing a house for the first time, you'll probably notice unusual or unique features on your own, but it doesn't hurt to ask your realtor to point them out as well because they could be vital for your insurance broker to know about. For instance, a less-than-common feature, such as an indoor hot tub installation, could impact the types of water protection coverage included in your policy. Solar panels sometimes also need extra consideration on home insurance, mainly if they are not roof-mounted, as they may require an add-on to be covered.
Even the overall home's uniqueness may impact its coverage. Comprehensive coverage, such as high-value insurance may need to be issued due to several different factors. Even more specific coverage, such as wine-cellar insurance if a wine cellar is on the property, may need to be discussed with a Morison Insurance broker.
If you come across a contender that features a wood stove or a wood-burning insert while shopping for a house, you must ask your realtor if it has had a WETT (Wood Energy Technology Transfer) inspection. These inspections, which must be carried out by an inspector certified by the non-profit association WETT Inc., are to evaluate the condition of a wood stove or wood burning insert and verify that it is safe to use and adheres to all current building codes.
This is an absolute must for wood stove insurance because insurance carriers require the stove to pass a WETT inspection before it can be covered by homeowners insurance so they can be reasonably sure the property is not at risk of a house fire caused by a deteriorated, improperly installed, or otherwise faulty wood stove. If you were to purchase a house with a wood stove that has not had a WETT inspection, getting it properly insured is to have the inspection done or have the stove removed. WETT inspections have three levels: visual, technical and invasive. In most cases, only visual or technical reviews are necessary because invasive inspections that may involve steps such as cutting open drywall are only necessary if there's reason to believe there may be serious concerns.
If you've already inquired about the heating system when shopping for a house and discovered that it is oil-powered, there must be an oil tank on the property to supply the system with fuel. Make sure to ask your realtor how old the oil tank is, not just the overall heating system, because most insurance carriers require the tank to be replaced about every 15 years. If it's older than that, you'll know it needs to be replaced immediately and could potentially include the replacement as a closing condition. But even if it's not that old yet, it's valuable information because you need to know how much time is left before you have to replace it.
Speak with your realtor about the property's insurance claims history when shopping for a house and think you may have found the one. Have previous homeowners filed a claim on the house or experienced insurance losses related to the property? If so, that could potentially impact your available options to get the house insured, depending on the nature of the claims and whether the risk has since been mitigated. For example, if a house was previously the subject of an insurance claim because deteriorated wastewater lines caused a basement flood, but the sewer lines have since been replaced and are now in good condition, that previous claim won't be as impactful on the risk assessment as it would be if the pipes had not been replaced following the damaging incident.
While this question may be most important for properties that happen to be located in flood-prone areas, even houses that are sitting high and dry on the top of a hill have the potential to experience flooding and all the damage and losses that come along with it. That's a massive part of why it makes sense for insurance providers to require or prioritize updated plumbing systems. But preventative measures can also lessen the risk of a destructive flood. Suppose you're shopping for a house that already has a sump pump or backwater valve installed. In that case, that's good information to pass along to your Morison Insurance broker because it could help you get a higher limit for overland water protection coverage.
When you're ready to dive into shopping for a house, it doesn't hurt to call your broker at Morison Insurance and talk to them about more of the types of questions you should consider asking your realtor. And, when you're at the stage where you've found a real gem and are interested in making an offer, speak with your broker again about the specific features and qualities of the property so they can offer advice about potential concerns and the best course of action in regards to your home insurance coverage.
At Morison Insurance, our brokers work for you—not for insurance companies. Our top priority is to find the right coverage to ensure that you are financially protected against the perils you're most likely to encounter over the course of your life. If you'd like to know more, give our professional team of brokers a call at 1-800-463-8074, or request a quote online to get started.
This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.