Whether you're buying your first home, relocating to a new community or simply searching for the home of your dreams, it's important to include the cost of insurance in what is likely your largest financial investment.
Homebuyers have a number of expenses to take into account when purchasing a property. Mortgage rates, closing costs - it can be easy to feel overwhelmed, whether you're a first-timer or an experienced buyer. With all that to worry about, insuring your new home may be the last thing on your mind, but it shouldn't be. By factoring insurance protection into your decision to buy a home, you will help ensure that all goes smoothly on the day when you finally pick up the keys.
Here are some points to consider when it comes to homeowner's insurance:
Where's The Fire Department?
One factor that impacts homeowner's insurance is the proximity of the fire department. Homes close to fire hydrants also cost less to insure. An adequate water supply, trained firefighters and ample equipment are all important aspects of determining homeowner's insurance rates. If you're considering a home in the country far away from the nearest fire station, you can expect to pay more for insurance.
Up On The Roof
Carefully check the condition of the roof of the home you are considering and ask when it was last replaced. A new roof matters to insurers. Also, the type of roof and whether or not it is fire and hail resistant may qualify you for a discount.
Showing Its Age
An older home can be charming and beautiful, but plumbing and electrical systems that have not been replaced or maintained can be unsafe. If you are considering buying an older home, find out how much it will cost to update these systems and factor that into the cost of ownership.
Shake, Rattle And Roll
Recent severe weather events, like the earthquakes in British Columbia and flooding in Alberta, highlight that many Canadians with standard homeowner's insurance lack catastrophic loss coverage, which is not provided under those policies. According to a J.D. Power and Associates 2012 Canadian Home Insurance Study, only 56% of customers in British Columbia purchase earthquake coverage despite the region's susceptibility to earthquakes. In Canada overall only 22 percent of customers add the coverage.
Blowing In The Wind
Although homes along coastlines are more desirable, they are generally more expensive to insure than those further inland as they are more likely to incur windstorm damage.
Everyone Into The Pool
If the house you're considering has a swimming pool or hot tub, you may want to consider adding an umbrella liability policy to give you added protection in case someone is injured in or around your pool or hot tub.
Before closing on the purchase of your new home, consult your insurance agent to make sure you have enough coverage to completely rebuild your home in case of a total loss. Also, ask about additional coverage such as:
- Replacement cost for personal possessions
- Extended or guaranteed replacement cost for the structure
- Bylaw and building code upgrades
- Sewer and drain back-up coverage
- Inflation protection
- Special riders for jewelry, collections and other expensive items
To save money, take the highest deductible you can reasonably afford. Check on discounts for multiline coverage, smoke detectors, fire extinguishers, sprinkler systems, burglar and fire alarms, deadbolt locks and fire-safe window grates, upgrades to mechanical systems, earthquake retrofitting, and wind-resistant shutters.
Insurance protection is an important consideration when buying your new home. Your HUB broker can review your new property to determine the level of risk and help you arrange ample coverage.