It can be easy for homebuyers to overlook home insurance costs. Most buyers tend to focus on factors such as quality of neighborhood, property taxes, school districts and available recreational and cultural outlets. But the seemingly mundane detail of home insurance can add up to a big investment. The size, location, construction and overall condition of a house can affect insurance cost, choice and availability, according to the Insurance Information Institute. When looking at prospective homes, the Institute recommends that homebuyers consider the following:
• Where is the nearest fire department? Houses located near a fire station usually cost less to insure.
• Are the plumbing and electrical systems in good condition? Poorly maintained, unsafe and/or outdated systems are more costly to insure than well-maintained ones.
• Is the home vulnerable to wind damage? A beach home may be more susceptible to wind damage and can be more costly to insure than homes located inland.
• Is the home at risk for flooding or located in a flood zone? Most standard homeowners' insurance policies do not cover floods, so you may need a separate policy, which you can get through the National Flood Insurance Program, which is serviced by private carriers, or from a few specialty insurers.
• Is the home located in an earthquake-prone area? If so, earthquake insurance requires an endorsement or a separate policy.
• Is the house well constructed and well maintained? Homes built with disaster-resistant materials and designed to meet current building codes are more likely to withstand natural disasters.
Your home is your biggest investment. Make sure you protect it with the right type of homeowners' insurance policy.
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