When you begin that search for your perfect home, you may prefer looking at newer properties or perhaps, the old world charm of older homes, but if you prefer the latter, you may run into some issues with insuring it. Many insurance companies have enforced tighter underwriting restrictions for one simple reason. When it comes to having the right type of protection for what may be your biggest investment yet, you may find there are potential insurance problems with older homes because they pose a much higher risk of the frequency and severity of claims.
Sealing the Deal May Not Be As Easy As You Think
You spent 6 months searching for the house that felt like “home” and you finally found it in an older neighborhood where every home is unique, featuring quaint architectural design. Everything went smoothly until the inspection revealed some issues with the plumbing, electrical system, and roof and now you are faced with a home you love along with the challenges it presents. Now you realize that finding an insurance company that will insure your older home may be an issue.
An older home is defined as any home that is 25 years or older so before you decide to purchase and/or sell a home that meets that definition, you need to be aware of some areas of concern according to N.C. insurance companies.
Below Are Some Areas of Concern When Insuring an Older Home, but Not Limited to:
Heating- Many older homes come equipped with older heating systems that can cause significant issues, leading to a higher propensity of loss potential. If the home you are seeking to purchase or sell has an oil furnace, you will want to hire a qualified technician inspect the furnace for age along with any leaks or cracks that could pose issues. Cracks in the furnace can result in a home filled with black soot.
Roof– A home inspector will examine the roof for potential issues such as age, broken or missing shingles, leaks and any areas that appear to be rotting. Obviously when there are any concerns, the roof issues need to be addressed and resolved.
Electrical– Most insurance companies today have huge concerns of insuring a home equipped with fuses instead of circuit breakers and many insurers simply will refuse the risk due to the hazardous nature. Old fuse boxes can catch fire, resulting in catastrophic damages and should be replaced with circuit breakers, so if you find yourself longing for that older home, request that the seller replace those fuses. It could be a lifesaver! Another area of concern should be with knob and tube wiring along with aluminum wiring. Many companies simply will NOT insure these homes.
Plumbing– Older homes typically have older plumbing and that can be an issue when it comes to getting insurance. Many older homes have galvanized plumbing, which may pose significant issues down the road if it hasn’t already. If the home of your dreams has galvanized plumbing it is recommended you have a qualified, specialized plumber perform a thorough inspection and correct any issues that are uncovered. Furthermore, you will need to do your homework to ensure you find an insurance company that does in fact insure homes that have this type of plumbing. If you have any questions, always contact your local N.C. independent insurance agent and we can assist.
Hopefully these tips will help you be prepared when you are either in the market for an older home or plan to list or sell an older home. If you ever have any questions, feel free to give us a call at 866-869-3335.