People tend to only think about insurance once they’ve settled on a home. They see it as a required formality before finalizing the purchase. And yet, in certain situations, finding an insurer willing to cover a property can be surprisingly complicated.
And it’s not necessarily because of a major problem with the property in question! The age of a house isn’t automatically an issue either. A well-maintained century-old residence can be in excellent condition.
So, what causes insurers to become more cautious?
Outdated Components
Insurance providers may pay particular attention to ageing systems, including:
- the plumbing
- the electricity
- the heating
- the roof
A house in which owners have never modernized certain components may be at greater risk of water infiltration, fire, or other damage.
Some buildings have electrical systems or wiring that experts deem hazardous. As a result, an insurance company might request an inspection or insist that they be replaced.
In some situations, the insurance company may require that the owner carry out repairs before agreeing to cover the property.
It’s therefore essential to verify this information before purchasing an older house.
A Roof in Poor Condition
The roof protects a large portion of the house from water infiltration. The roof’s age and condition may thus affect the insurer’s risk assessment.
When providing a home insurance quote, the insurer
- may ask about the age of the roof and for details regarding its condition;
- may, depending on the case, require photographs or an inspection.
You may find yourself subject to certain exclusions or limited coverage if you have a very old or deteriorated roof, or one that shows signs of water damage. In some cases, you might be obliged to replace the roof to get home insurance.
A Wood-Burning Stove
A wood-burning stove may be synonymous with comfort and cosiness, but it also poses a fire hazard.
The system must, namely, comply with applicable standards and be properly maintained.
The insurer may, for example:
- ask for information about the stove, its installation, and upkeep;
- require proof that the chimney is up to code.
It’s always better to check whether the property can be insured before proceeding with the transaction, rather than discovering a problem after the purchase.
A Pool or Other Specific Types of Equipment
A swimming pool, a spa, an outbuilding, a greenhouse, or other outdoor structures may necessitate additional insurance protection.
They don’t automatically make a house difficult to insure, but they may affect the premiums and coverage requirements or terms.
The rule is simple: it’s best to inform the insurance company of all large buildings or equipment present on the property.
A Property in a High-Risk Area
Location also plays a role!
Insuring a property in an area prone to flooding, landslides, forest fires, or any other kinds of natural hazards can be harder and cost more.
Proximity to a body of water, for example, can be an important factor to consider when buying a home.
A History of Claims
When evaluating a property, potential buyers should not only look at its characteristics, but also its history.
Repeated water damage, several major claims, or prior losses may influence an insurer’s decision.
A seemingly resolved issue may, therefore, continue to cause problems when it comes to insuring the property.
A Property With Unusual Features
There are residences that fall outside the norm: houses constructed with uncommon materials, self-built dwellings, buildings with commercial spaces, homes located a long way from public utilities, or properties with multiple uses.
The more unconventional the house, the more you may need to find a specialist insurer capable of appropriately assessing the risk.
The Right Questions to Ask Before Buying
When a house has several distinctive features, it’s risky to wait until after the purchase is finalized to check whether the property is insurable.
Before submitting an offer, a buyer can send the available information to their real estate broker or insurer to determine if the residence can be adequately insured.
It’s also important not to confuse an “insurable home” with an “easily insurable home.” An insurance company may cover a property, but only under certain conditions, with a higher premium or limited protection.
The key takeaway is that home insurance shouldn’t be seen as a mere last-minute formality. Much like the state of the roof, electrical wiring, or plumbing, insurance should be at the forefront of your pre-purchase checklist when considering a property.
If you’re curious about the details of a particular house or condo, don’t hesitate to reach out to your real estate broker!