6 Insurance Questions You Should Ask Before Buying a Home
If the recent rash of earthquakes and flooding across the world have taught prospective homebuyers anything, it's that the location of the home, as well as having homeowners insurance, will aid your financial survival if disaster strikes. However, first-time homebuyers have a tendency to overlook these factors when theyA?re looking for a new home.
It's important to take stock of the surrounding area and the neighborhood -- look for large bodies of water, heavily wooded areas, etc. -- before making a decision on a home. What's more, the International Insurance Institute, otherwise known as the Big I, advises homebuyers to ask themselves two questions before they even think of buying their dream home: How much will the home cost to insure? And will separate coverage be needed for certain disasters, such as fires, floods, or earthquakes?
In order to make sure prospective homebuyers find the right residence in the right location, the Big I has six additional insurance questions everyone should ask themselves before deciding on a home:
- How far is the home from the fire department? Houses that are near a fire station with professional firefighters usually cost less to insure.
- What is the condition of the plumbing and electrical systems? Poorly maintained, unsafe or outdated systems can cost more to insure.
- Is the home vulnerable to wind damage? Find out if private insurance, state-run, or veteran-specific insurance programs are available. Is there a windstorm deductible, and how high is it? A home on or near the beach may be more costly to insure than one inland.
- Is the house at risk from flooding? Flood insurance is not covered under a standard homeowners insurance policy. However, itA?s available from the National Flood Insurance Program, which is serviced by private carriers and from a few specialty insurers.
- What about earthquake risk? Earthquake insurance requires an endorsement or a separate policy.
- Is the house well built and well maintained? Homes built by reputable builders using disaster resistant materials and designed to meet current building codes are likely to better withstand natural disasters.
The Big I also recommends that first-time homebuyers enlist the help of a home inspector and insurance agent during the home buying process. These professionals can help answer important insurance questions, as well as help you access a homeA?s loss history report A? a log of water damage, fires, in addition to other losses.
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