Insuring Your New Carlsbad Home

Having insurance on your home is pretty darn important, with natural disasters and all sorts of other things that may happen to damage your property. I wouldn’t take the risk to not have insurance but some folks do. Their choice.

One of the critical things you should do in the early phase of your real estate transaction when purchasing is to check on the insurability of the property during the due diligence phase.

Indeed, insurability is important enough that it’s mentioned in the California Residential Purchase Agreement (RPA) that buyers complete in item 10 (A) as part of the “buyer’s investigation of property and matters affecting property.”

If you are a cash buyer, you can make the choice to not have insurance, although that's a huge risk.

If you are getting a loan your lender will require you to have appropriate insurance to cover their collateral…your home. You’ll need to provide proof of insurance and payment for one year in advance at the time of closing, at least in my area.

Getting insurance can be tricky with certain properties, and you shouldn’t assume there won’t be a problem. Some of the issues I have run into or hear of that can make getting a policy difficult or expensive, and some companies will simply decline to insure certain properties.

• High risk fire zone
• Earthquake zone
• Wooden shingle roofing
• Prior claims (noted in C.L.U.E Report- Comprehensive loss underwriting exchange)
• Waterfront Property
• Bluff Property
• Difficult access by fire trucks
• Properties in an identified flood zone
  

Chances are there won’t be a problem, but you certainly want to know before proceeding with the purchase, so look into this right away once you have an acceptance, either with your current insurance provider or other recommended vendors.

And your lender will require it.