Buying a home is a major life milestone that inevitably comes with a long to-do list. While upgrading appliances and jumping into yard maintenance may feel like the most urgent priorities on your new homeowner checklist, the importance of reviewing insurance coverage for your new house is often overlooked.
We’ve put together this handy new homeowner checklist to simplify the process so you can focus on more pressing decisions—like picking out the perfect paint color.
What Impacts Home Insurance Coverage and Rates?
In today’s real estate market, it’s easy to get swept up in a flurry of listing photos and competitive bidding wars. Most buyers know to ask about property taxes and school districts, but not everyone is aware of the factors that impact insurance rates and availability when purchasing a new home. In addition to basics like the age of your home, roof condition, and flooding potential, here’s a short list of six additional considerations that may come as a surprise:
1. Proximity to the coastline, earthquake, wildfire, or flood zones
Geography plays a large role in determining risk, particularly in areas of the country prone to hurricanes, earthquakes, or wildfires. If you’re moving into a zone where these acts of nature are a concern, be sure to explore how the construction of your home impacts its ability to withstand a potential hazard—then discuss it with your agent.
Digging Deeper: Check out FEMA’s Flood Map to review flood zones in the area before you buy.
2. Proximity to a fire hydrant and/or fire station
When it comes to house fires, every minute matters. The distance between your home and the nearest fire station or hydrant can impact insurance rates given that even small delays in response time increase loss potential.
3. Wood-burning stoves
Although cozy, indoor wood stoves pose additional fire risks to a home. If you’re considering a new home with a wood-burning stove, let your agent know.
4. Old construction materials and methodologies
Historic homes are known for their charm, but under the surface, they may also bring additional hazards. Old material choices and approaches to building can pose greater risks and cause more issues than modern construction practices. If you’re purchasing an older home, be sure to consider things like wood roofing and outdated electrical systems, which a homeowners policy may not cover.
5. Swimming pools and trampolines
While recreational features like swimming pools and trampolines add a layer of extra fun to any backyard soiree, they also pose additional liabilities. If you’re considering a home with either, discuss these extras with your agent to determine the appropriate additional coverage needed.
6. Specific dog breeds:
Owning certain breeds of dogs can impact homeowners insurance availability and pricing. Some carriers will decline to cover these households entirely, while others may offer coverage excluding liability resulting from dog bite claims. Talk to your agent to learn more.
What to Look for During the House Hunting Process
One of the best ways to avoid discovering that your dream home is really an insurance nightmare is to hire a knowledgeable inspector once you’re in contract. They’ll review the house from top to bottom, taking note of any issues or concerns. And you don’t need to be a pro to keep an eye out for potential red flags during the house-hunting process. For example, here are a few things to look for:
- Water stains on ceilings, which may suggest previous leaks or water damage
- Water damage on flooring or in basements potentially indicative of past flooding in the home
- Termite damage, learn what to look for and why to avoid it
Don’t hesitate to ask the seller about past damages, issues, or losses. If repairs have been made, inquire about who completed the work to ensure it was done by a licensed contractor or professional.
Central Tip: Only hire licensed, qualified movers, and always ask to see proof of insurance before you sign a contract. As a homeowner, this helps protect you from liability resulting from physical losses or injuries that may occur during the moving process.
New Homeowner Checklist: Getting The Coverage You Need
One of the first and most important things you can do when purchasing a new home is schedule a consultation with your insurance agent. Meeting with them early in the process ensures they’ll have time to get everything in order before your closing date. They’ll also walk you through a list of relevant questions about your new home to provide guidance on the right coverage for your needs.
Below, we dive into five of the most common policies new homeowners need.
While most homeowners policies provide coverage for personal property such as jewelry, fine arts, furs, guns, and musical instruments, there are often limits on the amount of coverage and the covered causes of loss. These limits can leave coverage gaps. Personal Property Coverage provides broader coverage that helps to fill exclusions and gaps in the event of a loss.
Typically, homeowners insurance policies don’t cover mechanical or electrical breakdowns. Adding Equipment Breakdown Coverage to your homeowner’s insurance policy lets, you enjoy peace of mind knowing that many of the expensive systems and appliances—like your HVAC, refrigerator, washer, and dryer—are covered.
In most instances, the underground sewer and water piping that connect a home to the street are the homeowner’s responsibility, though most homeowners policies exclude coverage for underground lines. Utility Line Coverage can save you thousands of dollars by kicking in when a covered line leaks, breaks, tears, ruptures, collapses, or arcs. Should a covered loss occur, it pays for the damage to the utility line, excavation costs, expediting expenses to make repairs, and outdoor property damage resulting from the loss.
If you operate a business from your home, coverage for some items related to the business operation may be limited or excluded under the standard homeowners insurance policy. Home Business Coverage helps protect your home business equipment and supplies, and your home business liability for covered losses.
If you own lakefront property, your homeowners policy may not provide coverage for your permanent dock if it is damaged due to the weight of ice or snow. A Boat Dock Coverage endorsement ensures peace of mind by providing coverage to a permanent pier, wharf, or dock when physical damage is caused by freezing, thawing, pressure, or the weight of water or ice, whether driven by wind or not.
Central Tip: Already a homeowner? It’s a good idea to schedule an annual coverage review with your agent. Be sure to also contact them whenever you’re planning to upgrade your home or purchase new valuables to ensure adequate coverage.
Enjoy Additional Coverage with Central’s Signature and Summit Homeowners Policies
In addition to integrating many of the specialized coverages listed above, Central’s Signature and Summit Homeowners policies offer a broad range of additional coverage, including:
- Full Replacement Cost Coverage to rebuild your home at the same location after a covered loss, even if the cost to rebuild exceeds your policy’s limit.
- Replacement Cost Coverage for your personal belongings with no reduction for depreciation.
- Cash Out Settlement Option should you choose not to repair or replace your home after a covered total loss.
- Waiver of Deductible for a covered loss that exceeds $50,000.
- Additional Living Expense provides coverage for the extra expenses you incur to maintain your standard of living while your home is being repaired after a covered loss.
- Tree Removal and Replacement pays to remove tree debris and replace trees fallen on your property due to a covered loss.