Being in the market to purchase a new home is always a big and exciting step in someone’s life. But sometimes this process isn’t as exciting as you would like it to be. It’s not that getting your new home isn’t exciting, it is the headache you may experience afterwards if you aren’t careful. It is easy to overlook certain aspects of a property when looking to buy a new home. How is heated, when was the electrical updated, how about the plumbing? This items can go undetected when going through a home and can actually create a big headache and sometimes a lot of money for you down the road. Our list focuses on things to look for when buying a new home as they relate to your home insurance policy.
Believe it or not, there are more insurance claims as a result of water damage in Ontario than pretty much all the other perils combined. When looking for a new home it is important to look into things like where is the nearest body of water, how is the house graded, has there been previous water damage or damage to the foundation? You should ask these questions to your real estate agent or contractor to make sure you are at a lower potential risk of water damage. If there has been any previous water claims on the property it will have to be disclosed on the sellers listing and will have to be disclosed on the insurance policy as well. If you do end up buying a home that is in a high risk zone for water damage, just be wary that it may be difficult to get the best water coverage or any at all. Most of the time, if you can get coverage, there will be sub limits on the coverage you receive and with water claims that can mean a lot more money out of your own pocket.
In new homes you typically won’t have to worry about electrical updates, however, in older homes it can often lead to a major headache and additional costs that you didn’t think about when buying the home. Insurance companies prefer to have a home use a breaker panel with copper wiring. If that is the case with the home you are looking at you are good to go! In the event you buy an older home, that may not be the case so make sure you ask about when the last electrical update was done and what was done during that update. While going through the potential new homes check to see if it uses breakers or fuses. If it is fuses try and get it built into the agreement that the seller has to replace it to a breaker panel. If not you may be on the hook for a few extra bucks to do it yourself. Also you will want to ensure there is no aluminium or knob and tube wiring. If there is, the insurance company will require an ESA certificate from a certified electrician to confirm everything is still up to code. If not you may be in for a big renovation.
Another area that people do not always think about or look at when buying a new home is the roof. They see a roof on the house, but don’t bother finding out about when it was last updated or any warranty information on the roof. Again, asking your real estate agent to disclose this information is always a good idea as the last thing you want is to buy a house and then be told from your insurance company that the roof hasn’t been updated in 20 years and you need to replace it. Some roofs even have 40 year warranties on the shingles but this doesn’t always stop the insurance companies from demanding an update.
Insurance companies will straight up deny writing a policy if there is galvanized plumbing. This type of plumbing was typically used in older homes and has been known to deteriorate and cause severe damage. Oh by the way, if your piping does deteriorate and you have damage to your home you can bet that your insurance company will not be supporting the claim as they do not insure the wear and tear of a home, only sudden and accidental losses. It is a tedious job to replace the plumbing, as that often requires digging stuff up and tearing into the house and it may be a make or break decision in buying the home.
When buying a new home it is important to look at the heating type. I mean, in Canada you want to make sure your home is going to be warm in those winter months, and you want to avoid unnecessary costs where you can. There are many ways to heat a home but some are far more energy efficient than others and can mean lower insurance costs. If you use oil heat your premium can be more money and you will need to provide information on the age of the tank, the type of tank (single/double walled), thickness of the gauge (2.0, 2.3, 2.5). All of this info is located on a plaque on the side of the tank. If you use any wood heat sources you will likely need to confirm a WETT inspection has been completed. Forced air through a central gas furnace seems to be common, you’ll just want to make sure the furnace has been updated within the last 20 years.
Hot Water Tank Information
Your real estate agent will inform you if the hot water tank is rented or owned but you will also want to confirm the age of the tank. It is also a good idea to look into if there is a main valve shutoff for your water and what type (manual, monitored, automatic) it is as you may receive a discount with your insurance company. Some insurance company’s also will also give you a discount if you have a tankless water heater, which seems to be the new thing!
All in all when you are buying a new home you want to pick one that you love. We just want to make sure you don’t pick one that you think you love and then realize there are a ton of costly updates that need to be done to it and make you all of a sudden not love it anymore. Happy living!