If you have an older home, you may have a hard time finding homeowners insurance coverage for it; your premiums are likely to be higher too. This is because of the dangers typically associated with older homes. The following three measures should help you buy coverage for your older home without overspending:
Base the Coverage on Value
For an insurance based on value, the insurer pays you the value of the damage in case of a disaster. For example, if your house is totally destroyed in a storm and you insured it for $250,000, then that is what you get even if it can't rebuild the home. If you had insured the house based on its replacement cost, however, the insurance company has to shoulder the cost of replacing it.
Insuring an older home based on replacement cost is expensive because old homes are difficult to rebuild exactly to their pre-damage status. The materials and design of an older home are likely to be difficult to replicate. It is much better to value the house and peg its coverage (and hence premiums) on its dollar value.
Have the House Inspected
Insurance companies are wary of older homes because they are riskier to insure than newer homes. Here are some of the reasons for this heightened risk:
- Older homes typically have outdated electrical wiring that increases their risk of electrical fire
- Older homes may have outdated plumbing that increase risk of water damage
- Older homes are nearing the end of their useful life and can fail at any time
- Some older homes weren't constructed up to code, which means they are inherently unsafe
- Some older homes were constructed by materials considered unsafe by today's standards
Boost your chances of securing cheap coverage for your older home by having it inspected. Hopefully, the inspection will not reveal any dangerous issues and the insurance company will be satisfied.
Update Dangerous Sections of the House
Of course, your older home may be difficult to insure because it really does have some dangerous issues. For example, if the electrical wiring is really inadequate compared to the load you are using on it, then the wiring is a ticking time bomb that can lead to an electrical fire at any time. In that case, it's best to upgrade the electrical wiring to make it safe.
Therefore, identify all the problematic areas of the house and improve them before buying coverage. You can also talk to insurance agencies like Hilborn Insurance for more ideas on how to make your home safe and easier to insure.