Let's face it. Older homes often have benefits and a charm new homes can't recreate. Their location, size, and maturity of the neighborhood where they sit can drive the price up. Ever wonder why the cost of a 3,000 square foot house in Highland Park in the Dallas-Fort Worth area can double in price compared to the same-sized, newly built home in the suburbs?
If you have your heart and mind set on buying a seasoned home (or looking to insure your current, aging home with a new carrier) in an established neighborhood in a great location at premium cost, you may want to prepare your wallet to pay more for home insurance.
Insurance carriers don't look at your older home through the lens of charm and great location, they look at it through the lens of risk. Like you, your insurance carrier wants your home to function properly against potential damage and not prove the cause of it. They are also concerned with replacement cost, i.e., what it will actually cost to rebuild or repair your home.
When applying for a home insurance policy, carriers may want to inspect your home to determine potential risks. What risks are they concerned about?
Just like health insurance, a younger and/or well taken care of body usually results in lower cost. If you're not trying to insure a newly built home, most insurance carriers want to see updates to wiring, heating/air conditioning units, plumbing and roofing. The more recent the update, the less risk for them to insure, and the lower cost of premium for you.
If you plan to purchase an older home, consider negotiating the upgrades before closing. If you plan to insure your existing older home with a new carrier, weigh the costs of a potential claim with the costs related to upgrading your home and saving on your insurance premium without sacrificing coverage or paying a higher deductible.
At Insurance For Texans, we know some carriers are more risk averse while other carriers specialize in higher risk. That's the great thing about working with an insurance broker. We provide options from a variety of carriers and work to match your insurance coverage needs with the right policy for great value.
We want your home to continue to charm you and not harm you in relation to your finances.