If you are in the process of looking for a new home, you need to consider not just what your mortgage payments will be but what your monthly homeowner's insurance costs will be as well. Certain hidden risks could result in your homeowner's insurance premium being more than you may expect it to be.
#1: No Nearby Fire Hydrants
When insurance companies consider the risk of providing you with insurance, one component they look at is how easy it would be for a fire department to respond to a fire at your home. Not having a fire hydrant that is nearby and accessible can increase the risk of fire to your home, as can living on a road that is difficult for a fire truck to navigate. If you are buying a home in an area with a high wildfire risk, not having a house that firefighters could easily defend can increase your premium even more.
When looking at homes, find out where the nearest fire hydrant is and how easily and quickly the nearest fire station could respond to a call at that property.
#2: Outdated Systems
When looking at homes that are older than a few decades, you should always inquire about how old the heating system, plumbing system, and wiring system are. If you purchase a home with older heating, plumbing, and wiring systems, you could face a higher premium due to the increased risk of burst pipes, leaking water lines, and electrical fires. An older home with updated systems is the way to go if you want to purchase an older home.
When looking at homes, you will want to figure out what the flood risk is for the home. Your regular homeowner's insurance policy is not going to touch flood insurance. That is something extra that you will have to purchase in addition to your homeowner's insurance policy, driving up the total you spend on insurance each month.
Finally, another hidden risk when purchasing a home is earthquakes, which are also not covered with homeowner's insurance. With earthquakes, you will have to purchase coverage separately, just like with flood insurance, driving up the total cost you pay for insurance for your new home.
When looking at a home, be sure to consider how easily the house can be defended against fire and how old the primary systems are, such as plumbing and electric, as both of these hidden factors can skyrocket your premium costs.
Also, watch out for homes with flooding and earthquake risks, as you will have to purchase separate insurance to protect against those risks, which will add to your monthly insurance and mortgage burden. Finally, before finalizing the purchase of a home, call up your insurance agent and get an estimate for what the homeowner's insurance will cost so you are not surprised after you buy the house.
For more information on homeowner's insurance, contact a local insurance provider.