With all that has been going on in the insurance industry lately, a home policy just isn’t what it used to be. Premiums and deductibles are higher and cover less. And getting a new policy for that home you’re hoping to own might prove a difficult exercise.
Buyers, be aware that a property’s claim history can affect its insurability. Too many claims, or even just inquiries about a problem, can scuttle a potential buyer’s new policy. This means that once your new home is under contract, you must immediately ask your insurance agent if there are any insurability problems. And I mean right away -- even before the inspections. Ask what claims show up on the property records. Ask if the home is in the flood plain. Obtain an elevation certificate, and be aware that some of the flood plain boundaries have moved.
The main insurability culprit is water damage – which is obviously a problem here on the Gulf Coast where tropical storms are common. Getting insurance can take a while if a home has had recent water claims, even if the source of the initial claim and all related damages have been completely repaired.
Don’t panic if this insurability question crops up during your house hunt. It is not an impossible situation. Still, before you bond with a new home, it’s best to know what you’re dealing with.