It is a buyer’s market when it comes to housing. With housing prices at an all-time low and tax incentives expiring soon, there are a few things to consider when it comes to homeowners insurance before making a costly investment decision.
Before purchasing a home, consider:
- Flood insurance. Is the home you are interested in located in a flood plain? If so, how much will flood insurance cost you? Keep in mind flood insurance must be purchased separately from homeowners insurance
- Past damage. Just as you can request a history report on a used vehicle, you can request a CLUE (Comprehensive Loss Underwriting Exchange) and/or an A-Plus (Automated Property Loss Underwriting System) report on a home you want to purchase. These reports will detail insurance claims involving the home, such as those relating to fire, floods, water damage and mold. Knowing the damages a house has experienced can help you know about potential problems to look for, such as mold damage that was not completely remediated.
- The history of a home’s location. Consider the natural disasters your home may fall victim to, like hurricanes, tornadoes, heavy rains, earthquakes, wildfires and so on.
- Safety first. A home with best safety features can lower insurance premiums. The New York Times reports “a home in a community with a professional fire department rather than volunteers” may cost a homeowner less to insure. In addition, “Installing smoke detectors, burglar alarms and deadbolt locks can save you 5 percent. It can be expensive but installing alarms that alert police and fire of a break-in or fire can cut as much as 20 percent from the premium cost.”