Guest author: Katherine Wood, contributor to The Homeowners Blog at HomeInsurance.com. The Homeowners Blog serves as a resource center for insurance consumers and homebuyers across the country.
Your down payment is set aside, you have been approved for a mortgage and your offer has been accepted, so you are financially ready to close on your new home, right? Not so fast. Before closing, your lender will require home insurance to protect its interest in the house; are you prepared for what the premiums may cost you? Certain home and location features can significantly increase premiums and unexpectedly put you over budget. Avoid this insurance sticker shock by considering the below during your home search.
Consider buying near a fire hydrant or station. Being within 1,000 feet of a fire hydrant or less than three miles away from a fire station will help lower your insurance premium because your home will be better protected during a fire. The farther your home falls outside those parameters, the higher your premiums can be.
Beautiful scenery may come at a cost. Your location could also dictate what supplemental insurance you will need. Living in some of the country’s most beautiful areas can come at cost for homebuyers. Flood, earthquake or hurricane insurance aren’t included in standard policies, but could be required in your part of the country.
Don’t forget the roof during inspection. Many house hunters don’t give the roof a second glance when browsing through a home, but the type and age of your roof can drive up insurance costs. If you want to see much lower premiums on your bill, make sure the roof is relatively new and made with strong, durable materials. A home’s electrical, plumbing, and heating and cooling systems can also raise costs – especially if they are older and more likely to fail. Make sure these are up-to-date with newer materials to ensure lower premiums across the board.
Pool problems. The fun of a pool may be short-lived once you see the costs associated with having a pool on your property. Since pools increase the chance of injury or lawsuit, buyers will most likely have to purchase additional liability coverage and install a self-locking fence. Even a stranger trespassing to swim – or the trespasser’s family – could file a lawsuit in case of an accident. Other outdoor leisure items like trampolines and jungle gyms fall into this category.
Considering these factors during your home search will help you avoid breaking the bank when it is time to close. You can use that extra cash to furnish your home or invest in that vacation home you’ve always dreamed of – it is never too early to start planning!
For more information on home insurance, visit HomeInsurance.com.