Purchasing home insurance is often a confusing process. Part of the confusion is due to the complexity of insurance carrier underwriting. A home buyer may fall in love with a home that turns out to be a nightmare to insure. The results of this difficulty include increased cost, diminished coverages, additional time to find coverage, etc. We have outlined several examples of homes that can be difficult to insure and may take additional time to find competitive insurance. The faster an insurance buyer starts looking for coverage the more competitively priced and thorough the coverage could be.
Ø Homes without continuous foundations. These are homes that are typically on stilts or some other structure that is not a typical foundation. Insurance carriers have issues with this type of building because pipes tend to freeze easier.
Ø Homes with two or more non-storm claims. Non-storm claims can include vandalism, theft, water damage, etc. These types of claims can be avoidable hence the insurance carrier will look closely at multiple claims from these sources.
Ø Homes with farm or business exposures (such as home day care). Insurance carriers are concerned about the “traffic” of third parties a home business can bring. They are also concerned with the significant injury exposures presented by farming machinery. Home day care carries an elevated exposure to bodily injury and other possible losses such as abuse, etc.
Ø Homes that have multi-layer roofs. Some homes have new roofs that were installed over old damaged roofs. This practice is an issue for insurance carriers because the water proof integrity of the roof is quickly compromised.
Ø Homes that contain fuses; not circuit breakers. A home containing a fuse box means the electrical system of the house has not been updated for over 25 years. Homes that contain fuse boxes suffer a much higher rate of fires than homes with circuit breakers.
Ø Homes that appear on an historical list. This type of home has several limitations on what materials and workmanship can be used for repair or rebuild. These limitations significantly increase the cost to rebuild.
Ø Vacant Homes. Obviously, homes that are vacant suffer far more losses than occupied homes. The most prevalent losses to vacant homes are frozen pipes, vandalism and theft. Most “preferred” carriers will not write vacant homes. Specialty carriers provide this coverage but it takes a bit longer to place coverage and the coverage is very limited.
Ø Homes with water slides or trampolines. Both of these “attractive” apparatus create an enormous additional exposure to liability. Most carriers shy away from homes that possess either of these. There is coverage available but the options are few and the premium is very high.
Ø Homeowners who own certain breeds of dogs. Breeds such as pit bulls, Rottweiler’s, Dobermans, etc. are accountable for the vast majority of serious dog attacks/bites. Insurance carriers are understandably concerned for the increase in liability exposure. Again, available coverage options are very narrow and the premium is certainly increased.
The best solution for finding affordable and broad coverage for homes in the above categories is to start early and talk to an independent agent who represents many carriers.