When buying a home, it is imporant to look for certain things that could limit the options you have when it comes time to purchase insurance.
Altough they are less common here in Nebraska than asphalt shingles, there are still some homes that have wood shingles.
Wood shingles can be very durable against hail and wind, but the cost to remove and replace those wood shingles is where insurance companies cringe a little.
The average cost to remove and replace a wood shingle can be two to three times the cost to remove and replace Asphalt shingles. Depending on the size of the roof and condition of the woood shingles, the removal alone can cost more than an new asphalt roof.
Because of this, the number of companies that will insure a house with a wood roof is decreasing. Even if the roof is brand new, many companies will politely decline.
While there are insurance companies out there that will insure a home with a wood roof, your options may be limited.
Once you get inside the home, one important question to ask your realtor is the type of electrical panel that the home has. Newer homes will have a circuit breaker panel for the electrical, which insurance companies are comfortable with.
Older homes may have what’s known as knob and tube wiring. In older homes, porceline fittings were used to support electrical cables that were ran through the home.
According to the Mr. Electric website referenced above, “Knob and tube wiring was installed at a time when there was very little demand inside homes for electrical devices, and the circuiting and wiring was designed to that standard.”
Another type of electrical to be aware of in older homes is a fuse panel. Fuse Panels were used in homes up until about the 1960’s, when circuit breakers became the safer, more reliable option for homeowners.
Simply put, for both of these, the amount of electricity we use today is WAY more than it ever was when these were the standard. The appliances we use today pull more electrical energy than those of the past, and it is too much for older wiring and fuse panels to keep up.
If the wiring or panel is overloaded, there is a risk of fire, and the insurance companies know this.
On a positive note, if the house of your dreams has one of these, there is a glimmer of hope.
If replacing a fuse panel with a circuit breaker is not in the cards, you can have a licensed electrician come in to do an inspection. You may have to foot the bill for this inspection, but it may be your only saving grace when it comes to insurance.
An inspection from a licensed electrician, along with a report or letter of approval, is something that can be turned in to an insurance underwriter. If everything checks out, you may be able to get a coverage in place.
Porch and Deck Railings
Another thing to be aware of when purchasing a home is the railings that are on the porches and decks. Again, newer homes will have railings for both, but an older home may not.
And this is something that is easily overlooked. If you yourself can get up and down the stairs on the porch or deck with no issues, you may not think it is a big deal.
But to an insurance company, this is a liability claim waiting to happen. If someone falls and has nothing to grab on to to regain their balance, you, and your insurance company, may be on the hook for any medical expenses.
Depending on the insurance company, they may want a railing installed before they will put coverage in force. Or, they may require that railings be installed by a certain time after the policy is issued, with pictures submitted to prove that the work has been done.
Freestanding Stove or Wood Stove
In an effort to keep gas or electric costs down during the winter, some homeowners will have a wood stove installed. There are some other options, including corn and pellet stoves, for example.
If you are looking at purchasing a home with a freestanding wood stove, take a minute to look around it.
It is important that the freestanding stove has non-combustible mateial around it.
For instance, is there tile on the floor and walls surrounding the stove?
Or is it sitting on carpet with wood paneling on the walls?
The other question that an insurance company will most likely want to know is if the stove was professionally installed. A professional will know how far away the stove should sit from the walls that are surrounding it, which is also important.
When I have a client that is purchasing a home with a freestanding stove, I am usually required to take pitcures and measure the distance of the stove in relation to the walls around it. Then I have to send this info into the insurance company to make sure all their requirements are met.
The biggest concern for the insurance company is to make sure that there is nothing flammable around the stove, and also to make sure that a random ember flying in the air doesn’t cause something flammable around it to catch on fire.
If there is a detached garage or shed that has a freestanding stove, your options on insurance may be even more limited. Think of it this way…
A freestanding stove in a home is usually well maintained, and things that could catch on fire are kept away in an effort to prevent a fire.
But in a garage, there is a greater chance there may be flammable items, like oily rags, newspaper, or liquids. There is also the chance that a wood stove in a detached garage may be left unattended for a period of time.
If a freestanding stove was not professionally installed, or if there is a lack of non-combustible items around it, the insurance company may request that you remove the stove, either before the policy is in force, or within a period of time after you move in. They will likely request photos to prove this as well.
Siding is one item, along with the roof and gutters, that is typically well maintained on a home.
But it doesn’t hurt to take a walk around to make sure there aren’t any damaged or missing pieces when you are looking at buying a home.
There are many different types of siding these days, and some hold up to Nebraska weather better than others.
Vinyl siding for instance can become less durable over time in the extreme heat and cold. Hail and wind damage may be more likely to occur, causing holes in the siding.
On older homes, likely prior to 1989, you will want to see if the home has asbestos siding.
There are some companies out there that will decline to insure a home that has asbestos siding.
If you are working with an insurance company that will insure asbestos siding, they will likely want to know what kind of condition it is in. If there are broken and exposed shingles, maintenance to repair or replace those shingles may be required by the company.
Because of the obvious health risks that asbestos poses if the particles get into the air, the cost to remove it can be expensive. A contractor or siding company has to obtain a special certification to be able to remove asbestos siding because of the care and detail needed to make sure it is done safely.
If you find the home of your dreams, and you run in to one or more of these things, please don’t feel like you shouldn’t move forward.
The goal of this post is to make you aware of some things that could limit your options when it comes to getting insurance coverage, and in some cases, a home loan as well.
We have had conversations with prospective clients that had no idea that one or more of these items would be an issue in regards to insurance.
In some cases, they are calling our office days before closing and desparate to find insurance coverage so they can purchase the home.
It is important to be educated and have an idea of what may pop up as you are starting the process of buying a home.
There good news is, as an independent insurance agency, we can run quotes with multiple companies to help you find coverage, even for unique homes.