You know the feeling. Your eyes light up when you first see the photo. Your excitement heightens when you're there in person but at a distance. As you approach, step by step, your heart beats rapidly at the thought of the possibility of a relationship. Then you walk through the front door of the house you've found for sale.You may envision your future children sleeping cozily in their room or grandkids playing in the backyard. Should you make a move? Slow down! The property may seem perfect, but is it really the right fit?
Before making your decision to buy your next home, there are five factors to consider that could cause difficulties in getting insurance for the property and may impact your insurance premiums.
- Age and health of the property
When was the home built and has it been updated? Newer plumbing, heating elements and electrical systems are less susceptible to fires and other hazards. Does it have any beautiful but antiquated features that would be difficult or expensive to replace or match? When was the heating or hot water tank last replaced?
- Amenities and surroundings
What gives the neighbourhood character? How far is the home from helpful resources, such as a fire hydrant or fire station? Is the home located in a fire hazard area, flood zone, coastal area or on a fault line? Has the area been victim of a fire or flood from natural or unnatural causes? Some insurance providers have areas marked as being within a zone where they either don't offer insurance or they charge a higher premium.
How is the structure of the home? When was the roof was last replaced? Look at the roof for damaged or missing shingles, or plant growth. Indoors, check for staining on the ceiling or signs of water damage that could have been covered up by paint. Also check to see if the home has fire or hail resistant tiles and siding. Have renovations been done with appropriate permits?
- Premium Features
Is the house built for entertaining? For example, a pool can increase the value of the home, but that value can be countered by higher insurance premiums because of the increased liability. The increased liability comes from the increased risk of damage to the house or property if there is a leak or fire caused by faulty construction or equipment. If something happens to the house causing damage to the pool, the pool is costly to replace. Does the pool meet the municipal laws in regards to fencing and decks? The human risk of injury or drowning is also a factor.
Is there anything in the property's past that is cause for concern? Review past claims and the repairs that were made to determine if there are any indicators of possible future damage. Check to see if the fix was just a "bandage" to manage the situation in the short-term, or if it was fully repaired to prevent future damage.
After learning about all of its secrets - the good and the bad - are you still head over heels in love with the house? If so, contact your insurance advisor to confirm the property's insurability before you remove subjects on your offer.
Home insurance is a key requirement for your mortgage. The Auxilium Team is happy to provide you with a referral to our trusted partners for a consultation and quote.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.