Wednesday, May 22, 2013
You might consider home insurance an afterthought when you're buying a house, but your lender will require you to have it before you get to the closing table. Sellers may also agree to pay for it as a negotiating tactic. Here are two of the most expensive and most popular home insurance scenarios you may encounter when searching for a home and the tips you need to keep those home insurance costs down.
1. Waterfront Location, Location, Location!
Flood insurance is required if the home is located within Special Flood Hazard Areas—this is property that FEMA has identified as having a 26 percent chance of being flooded over the course of a 30-year mortgage. Adding flood damage insurance to a standard homeowner's insurance policy can increase rates a few hundred dollars per year. Consider looking for a home near the water, but outside of the highest-risk flood zones. You'll be only a quick bike ride or walk from the water, though you might not be able to see the water from your window. Your homeowner's insurance rates will be much lower, and you can rest assured knowing that your home is much safer from coastal storms. Property values will be lower here, too.
2. This Old House
If you're a history buff, you may be drawn more to the Craftsman cottages and American bungalows from the early 1900s than to more modern styles. Homes older than 30 or 40 years typically don't qualify for preferred policies, which generally carry lower premiums. The reason is simple: Newer homes with modern features are much less risky for providers. The roof, electrical wiring, plumbing, heating and cooling systems can all be issues. However, if your heart is set on a vintage home, try to find an older home with electrical, plumbing and HVAC systems that have been updated to present standards.
Visit our site for more tips on insuring your dream home features.
Interested in purchasing the home pictured? Click here to find out more about the five-bedroom waterfront beauty in Williamsburg, Virginia.
This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. The HomeInsurance.com blog serves as a resource center for insurance consumers across the country.