What every new home buyer should know when getting insurance
House insurance is often one of the last things that buyers consider when they are caught up in the process of finalizing the purchase of a home. And yet, failing to meet insurance requirements is one of the most common ways to delay or fail to close a deal. Buyers of detached homes in particular need to provide detailed information about the property they are purchasing. Save yourself time and frustration by making sure that you have key information ready when speaking to your insurance broker.
Information can be divided into 2 categories: about the building and about you.
About the building
The MLS listing: this provides a wealth of information that will help your insurance broker calculate the replacement cost of the building, which will then play the major factor in determining your insurance premium. Give this to your broker and you will speed the insurance process substantially.
A professional appraisal or inspection report – great! If you’ve had one done, provide it to your insurance broker.
Electricals: houses should have copper wiring, circuit breakers, and minimum 100 amps. You’ll need to confirm the type of electrical wiring in the house.
Plumbing: pipes should be copper. If not, advise your insurance broker.
Heating and roof: what type are they?
Does the house have a fire or burglar alarm? Is it monitored?
Is the house sprinklered?
How old is the building? If it’s over 25 years old, you will need to provide the year in which updates/replacements (if any) were done to the electrical, plumbing, heating, and roof.
Has any past illegal drug production occurred in the house? If yes, advise your insurance broker.
Is there a pre-1970 underground oil tank on the property? If yes, the oil tank will have to be removed before insurance can be provided. Speak to your insurance broker about this.
Important: If you don’t know some of the information about the building… ask your realtor – they should be able to get the answers for you.
Have you had any claims or losses in the past 3 years? If yes, you’ll need to provide details about when it happened, description of loss, $$ amount of loss. If you’ve made a claim on an insurance policy, be prepared to provide the name of the insurance company, policy number, and amount paid out. (Keep in mind that all losses should be declared, whether or not insured.)
Do you own high value items such as jewellery, art, tools, etc? House insurance provides coverage for personal property, but there are policy sub-limits for certain classes of items. Discuss this with your broker.
Buyers of condos and townhouses
Building information requirements are less onerous, but you should know about the type of heating, plumbing, roof and electrical, along with updates to the building if older than 25 years old.
Important: if you are buying a condo, find out what the strata insurance deductibles are from your realtor or the property manager. There is a recent trend of soaring strata deductibles (as much as $100,000); if that is the case in the building in which you are buying a condo, you will need an insurance policy that will protect you adequately to the highest strata deductible.
Do you have any insurance questions? Contact Habitat Insurance at 604-438-5241 or firstname.lastname@example.org
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Disclaimer: This article is designed to provide information for personal use only. Please consult your professional insurance broker for further information. Habitat Insurance Agencies Ltd is not responsible for any legal disputes of this matter.