Thursday, September 19, 2013

Home Owners Insurance Considerations in Buying your Orlando Resale Home

Not only when you purchase your Orlando Home you consider the property condition, but to consider home owners insurance implications.  Not only are lenders creating stricter underwriting guidelines, but insurance companies are doing the same. Its seems every year there is new challenge to contend with.  Recently, Sihle Insurance Group, put out a good bulletin to things to consider when evaluating insurance for a home.  Its always good to know these items in considering a property and going forward into a contract.

Age of Home:   Once homes get beyond 30 years, most insurance carriers will require the buyer to purchase a 4 point inspection.  These inspections cover the a/c, electric, plumbing (including water heater), and roof.  An insurance company will want to make sure these 4 areas have been updated within the last 15 yrs and are in good condition.  Sihle Insurance Group does have carriers that will write a home with polybutylene plumbing, Federal Pacific boxes, and aluminum wiring.

When reviewing older homes with our buyers, we will look at electrical panel, there a few other brands the insurance companies do not prefer. Aluminum wiring is common in homes built 1970-1973.  We will discuss how this impacts your offer and transaction.

Roofs:  Shingle roofs > 20 yrs are hard to place.  Most carriers will want to make sure there is at least 3-5 years of life expectancy on the roof.  It is also very tough to find a carrier that will write a home with a flat roof or any portion of the roof that is 20% or more flat.

Unless you can prove the life expectancy, its like your roof would need to be replacing anyway at this age.

Fire Hazard:  Homes that do not have a fire hydrant within 1000 ft are surcharged and most carriers won’t write the insurance if there isn’t a hydrant within 1000 ft or a fire station within 5 miles.

It good to note where the fire hydrant is in relation to the property, its always a question your insurance agent will ask.

Bank-Owned/Foreclosures:  Some carriers are even getting picky with these properties due to the fact that most (not all) have some form of damage or missing features (i.e. a/c units, water heaters, etc).  Some carriers will now require us to submit for approval interior and exterior photos showing the true condition of the property prior to binding the policy.  Short sales are not subject to this requirement!

This is becoming a common question being asked when getting insurance.

Wind Mitigation Inspections:  If the roof of the home was put on in 2002 or newer, I always recommend that my clients purchase a wind mitigation inspection.  It will cost the buyer approximately $100 but they should receive more back in credits that remain on the policy at each renewal.  Most inspection companies can do the 4 point and wind mitigation inspections at the same time!

Dogs:  Buyers that have Pitbulls, Rottweilers, Chows, Dobermans, German Shephards, Akita, will have a hard time finding an insurance company to insure the home.

I had a buyer close on her property and the insurance carrier sent someone out to the property and discovered their dog.  The insurance company stated she need to submit a DNA test for her dog to rule out viscous breeds or they would cancel her.  She found another insurance carrier.

Crawlspace:  Those beautiful older homes that have crawlspace are also tougher to insure.  Some carriers will insure them if the open space is covered with brick and some won’t insure them at all.

We have not run into this challenge, but sure it does exist.

Other:  Homes with diving boards, slides, prior sinkhole claims, and any existing damage are tougher to insure.

I have had insurance agents not recommend additional sink hole coverage because it requires a field study that actually creates more insurance problems for even small side walk cracks or common stucco home cracks.

We help our buyers navigate the challenges of home buying,  Even if you buy a home that does not fit into a perfect insurance scenarios, there are always was to get insurance or repair property for preferred rates.