Insurance Perspective: 6 Things to Consider When Buying a Home

Buying a home is an exciting, expensive proposition. Buying a home can represent a level of financial security, depth of a relationship and/or your largest investment. You might be evaluating the size of kitchen you want, whether to buy a home with a finished or unfinished basement, or analyzing the neighbourhood of your foreseeable future.

What about your home insurance? Sometimes overlooked in home search considerations, finding the right home insurance policy is important.

Here are six insurance considerations to think about when buying a home.

Area affects price

Depending on where you live (by postal code or city) certain home insurance coverages might be mandated by the companies offering policies in that specific area. These coverages could include – but aren’t limited to – earthquake, flood, hail, wind, fire, guaranteed replacement cost (GRC) and sewer backup.

Just because a coverage is required by a company in one area, doesn’t mean all companies offering insurance in that area require that coverage. You should consider the degree of coverage you're looking for when moving to a new area. The more coverage you require, the more expensive your home insurance premiums will be.

Claims history follows you, not the home

If you’re looking at moving into a home that has had a few claims on it, know that those previous claims on the home won’t directly affect your home insurance price.

Home insurers look at the claims history of the individual applying for insurance. You should be prepared to disclose at least the past 10 years of your home insurance history (if applicable/available).

That said, if you know the home you’re interested in has a history of claims, it’ll be in your best interest to find out as much as you can about the home and severity of claims, then decide if it’s worth purchasing.

Updates improve rates

If you’re considering moving into an older home, it’d be good to evaluate the cost of updating certain areas of the home. Outdated electrical, roof and furnace are some areas that are red flags to insurers, which can lead to higher premiums.

Aside from the potential savings on your home insurance policy, having updated electrical, roof and furnace will also help you save on your utilities expenses. Note that specialty updates (i.e. airplane hangars) may lead to higher rates.

There are discounts available

Every insurance company will offer discounts to try and entice perspective insurance buyers to choose them over the competition. The discounts offered are, usually, in relation to the area or demographic of applicant the company has had success insuring (meaning an area or demographic that hasn’t had a lot of claims).

Discounts include:

• Bundle discount (with your auto policy)
• Mortgage-free discount
• Credit discount
• Anti-theft (alarm system) discount
• Loyalty discount
• Claims-free discount
• New business discount
• Occupational discount
• Student discount
• Gated community discount
• Smoke-free discount

Again, not all companies will offer all of the above discounts. Some might even offer more. Working with a broker will ensure you’re able to maximize taking advantage of the discounts available to you.

First time buyer catch-22

As highlighted under discounts, some companies will offer a cheaper rate to new business, in an effort to grow their book of business. To them, it’s a calculated risk they’re willing to take. However, some companies will charge new business – especially first time home buyers – higher premiums because of the uncertainty that comes with insuring someone without history.

The Surex Advantage

As a Canada-wide online brokerage, Surex has partnered with over 10 insurance companies to get their customers the best home insurance prices available.

When you fill out an online quote form at www.Surex.com (it takes about five minutes), you’ll be able to get all the discounts available to you. To make sure your quote is accurate and confirm your price, the personal broker assigned to you will contact you by phone or email to verify.

Instead of spending hours or days shopping around for the best home insurance quotes, let us do the shopping for you. Our pricing is 100% transparent, so you’ll see all the offers available to you and which company is offering what price to gain your business.