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3 things to look for as a first time homebuyer.
May 24th, 2023 - Ben Volk - 5 min read
Age of Roof
When considering purchasing a house one of the first things buyers should think about, when it comes to insurability is the age of the roof.
Many carriers will either, not insure, or charge an extra premium to insure a roof that is older than 15 years.
So hypothetically if you buy a home that either has a roof 15 years or older, or is about to BECOME 15 years old, the carrier could modify or non-renew your policy mid term costing you time and money. The best way to be aware is attentive to appraisal results and past inspections if any are available. An insurance agent can help you check the loss history on a property before issuing a policy
While investigating a roof, homeowners should look for various signs and conditions to assess its overall condition and identify any potential issues. Here are some important things homeowners should look for when examining their roof:
Things to look for :
Damaged or missing shingles: Check for any cracked, curled, or missing shingles. Damaged or missing shingles can lead to water leakage and further damage.
Loose or damaged flashing: Flashing is the material used to seal and protect areas where the roof intersects with other structures such as chimneys, vents, skylights, or walls. Ensure that the flashing is securely in place and free from damage.
Roof sagging or unevenness: A sagging or uneven roof may indicate structural issues and should be addressed promptly. It could be a sign of water damage, weakened supports, or other underlying problems.
Signs of water damage or leakage: Look for water stains, discoloration, or dampness on the ceilings or walls inside your home, as these can indicate a roof leak. Inspect the attic as well for any signs of water intrusion or mold growth.
Accumulation of debris: Remove any leaves, branches, or debris that may have collected on the roof. Excessive debris can trap moisture and contribute to roof deterioration.
Granule loss: Check the gutters and downspouts for an excessive amount of granules. Shingles naturally shed some granules over time, but an excessive amount may indicate shingle deterioration.
Cracked or damaged caulk or sealant: Inspect the areas where different roof components meet, such as vents, chimneys, or skylights. Cracked or deteriorated caulking or sealant should be repaired or replaced to maintain proper sealing.
Moss, algae, or mold growth: Pay attention to any signs of moss, algae, or mold growth on the roof surface. These organisms can retain moisture and lead to shingle damage if left untreated.
Proper ventilation: Check that the roof has adequate ventilation. Look for signs of poor ventilation such as excessive heat buildup in the attic or trapped moisture. Proper ventilation helps prevent issues like ice dams and extends the lifespan of the roof.
Fire Protection Class
Get this out of the way first.
Insurance premiums: The fire protection class, also known as the Public Protection Classification (PPC), assigned to a property by the Insurance Services Office (ISO) can have an impact on insurance premiums. Insurance companies use the fire protection class as one of the factors in determining the cost of homeowners insurance. Properties in areas with better fire protection typically have lower insurance premiums. By knowing the fire protection class in advance, you can get an idea of the potential insurance costs associated with the property.
Fire risk assessment: Understanding the fire protection class helps assess the fire risk associated with the property and its surroundings. The fire protection class takes into account factors such as proximity to fire hydrants, the availability of fire departments, firefighting equipment, water supply, and emergency response capabilities. A higher fire protection class indicates better fire protection infrastructure and resources in the area, which can potentially minimize the risk of fire damage to your property.
Fire safety considerations: The fire protection class can provide insights into the level of fire safety measures in the area. It indicates the effectiveness of fire prevention and suppression systems, which can be crucial in safeguarding lives and property. A property located in an area with a higher fire protection class is likely to have better access to fire hydrants, shorter response times from fire departments, and improved fire suppression capabilities.
Peace of mind: Knowing the fire protection class allows you to make an informed decision about the property's safety and potential risks. It provides peace of mind, knowing that the property is situated in an area with adequate fire protection measures and emergency services. This knowledge can be especially valuable if you have concerns about fire hazards or if you want to prioritize the safety of your family and your investment.
While the fire protection class is an important consideration, it should be noted that it is just one factor among many when evaluating a property. Other factors such as location, construction quality, property condition, and personal preferences should also be taken into account when making a purchasing decision. Consulting with insurance providers, local fire departments, or fire safety professionals can provide further insights and guidance regarding fire protection and prevention in a specific area.
Debris/Construction/Flood
Understanding and mitigating the risks associated with floods, debris on a property, and active hazardous construction is essential for property owners and prospective buyers. Let's explore each of these risks:
Debris Risk:
Accumulation of debris on a property can pose safety hazards, impede property maintenance, and increase the risk of fire or other property damage. Debris can come from various sources, including fallen trees, leaves, construction materials, or neighboring properties. When looking at potential property, keep in mind that you may have to clean or clear debris before an insurance policy can be bound or a loan will close. To mitigate debris risk:
Regularly inspect and clear the property of debris, particularly in areas that could obstruct drainage systems or pose safety risks.
Maintain trees and vegetation to prevent branches from falling and causing damage during storms.
Communicate with neighbors to address any shared debris concerns.
Active Hazardous Construction:
Active hazardous construction sites near a property can introduce risks such as accidents, noise, dust, and disruption to daily life. It is important to consider the potential impact of nearby construction activities when evaluating a property.
To mitigate active hazardous construction risks:
Research local construction permits and plans to identify any ongoing or upcoming projects near the property.
Consider the nature and duration of the construction activities, potential noise and dust pollution, and any potential impact on property value.
Engage in open communication with the local authorities, developers, and neighbors to understand the construction plans and timelines.
In all these cases, consulting with professionals such as real estate agents, insurance agents, local authorities, and relevant experts can provide valuable insights and guidance regarding the specific risks associated with a property. Conducting thorough due diligence, obtaining appropriate insurance coverage, and implementing preventive measures can help mitigate these risks and protect your property investment and well-being.
Flood Risk:
Floods can cause significant damage to properties and pose a risk to personal safety. It is important to assess the flood risk of a property before purchasing or insuring it. Factors such as the property's location in a floodplain, proximity to bodies of water, historical flood data, and elevation above sea level are considered when evaluating flood risk. It is also noteworthy to understand certain lenders will require you to carry flood insurance which is available but usually causes your insurance costs to double , if not worse.
To mitigate flood risk: Consult flood maps and consider purchasing flood insurance through the National Flood Insurance Program (NFIP) or a private insurer, especially if the property is in a high-risk flood zone. Take preventive measures such as installing flood barriers, elevating utilities and appliances, and maintaining proper drainage systems. Consider the property's surrounding infrastructure and community flood mitigation efforts.
Not all companies have the same appetite
Why knowing carrier appetite is important and why an independent agent can be beneficial:
Expertise and Market Access: Independent insurance agents have a deep understanding of the insurance market and the various carriers operating within it. They are familiar with the unique appetites of different insurance companies and can match your specific needs to the carriers that are more likely to provide the coverage you require. This expertise allows independent agents to navigate the insurance landscape and access a wide range of carriers, increasing the chances of finding the right coverage at competitive rates.
Tailored Coverage: Insurance carriers have different preferences and areas of expertise. By working with an independent agent, you can benefit from their knowledge of carrier appetites to ensure that your coverage is tailored to your specific situation. Whether you have unique risks, specialized requirements, or need coverage for a hard-to-insure property or business, an independent agent can help identify carriers with an appetite for those specific risks, increasing the likelihood of finding suitable coverage.
Risk Mitigation: Insurance carriers carefully manage their portfolios to maintain a balance between risk and profitability. They may have specific thresholds or limits on the types and amounts of risks they are willing to assume. An independent agent can help you understand the risk factors that carriers consider and guide you towards making informed decisions that mitigate potential risks. They can help identify any gaps in coverage, recommend risk management strategies, and find carriers that have an appetite for your risk profile.
Competitive Pricing: Insurance carriers set their rates based on various factors, including their risk tolerance and market conditions. Different carriers may offer different pricing for similar coverage. Independent agents can compare quotes from multiple carriers to find the best rates and coverage options for your needs. They can leverage their knowledge of carrier appetites and negotiate on your behalf, helping you secure competitive pricing while ensuring adequate coverage.
Long-Term Relationships: Independent agents often establish long-term relationships with multiple carriers. This allows them to stay up-to-date with changes in carrier appetites, coverage options, and policy terms. They can proactively review your coverage periodically, ensuring that it remains aligned with your evolving needs and making adjustments as necessary.
