Shop For Home Insurance

Finding home insurance coverage is a very important part of the home shopping process. In fact, there is a homeowner’s insurance contingency built into the Colorado purchase contract. If you cannot find coverage that is suitable to you, your lender, and/or your wallet, you can back out of the home purchase before the contingency deadline. Different insurance providers offer different coverages, but what should your homeowner’s insurance cover?

Fire

Fire and smoke damage is a typical event covered by insurance – if you don’t set your house on fire on purpose (seriously, don’t do that). Some policies will even pay for your lodging while the damaged parts of your home are rebuilt. In Colorado Springs, wildfires are a possibility. Choosing to live in an area of town (or out of town) more prone to wildfires may increase the cost of your policy. Research your risk of wildfire when you home shop and talk with your insurance company on how to manage your risk. Fire mitigating your property – that is, reducing your property’s risk of damage by wildfire – can help reduce the cost of your home insurance.

Roof

Leaks or damage to your roof is conditionally covered. If your policy has hail or storm damage coverage, and the roof was damaged because of such an event, insurance will typically pay for the repairs or a new roof. But if the damage or leak was a result of a lack of maintenance, insurance won’t cover it. Hail is another common occurrence in Colorado Springs, and some communities that have seen significant upticks in hailstorms are having a harder time getting affordable coverage. Climate change has increased the number of and strength of storms throughout the world, and insurance companies are being more selective in what and how much they will cover. Hail, wind, and storm damage must be reported within one year of the damage in order for many insurance policies to cover the cost of repair or replacement.

Theft

If your home is broken into or vandalized, your insurance will typically cover the loss up to a certain amount. Any extremely valuable items, like jewelry or art, may need their own separate policies as their value often exceeds what a homeowner’s policy would cover. Security systems and home safes can help deter thieves from targeting your home. When going on vacation, or if your home will be vacant for a time, use timers on your lights to make it look like someone is home. Home thefts tend to spike around holidays. Let a neighbor or someone you trust know you are going out of town so they can help keep an eye on your home.

Flood

Insurance companies are also being more selective when it comes to flood damage. If you live in a flood zone, you are required to have flood insurance when getting a federally backed loan (FHA, VA, Freddie Mac or Fannie Mae loans). Flood insurance is not covered in a standard insurance policy. You will have to buy flood insurance separately. What if you don’t live in a flood zone or near a floodplain, but your house happens to flood after an unusually big rainstorm? Will standard insurance cover the damage? Unfortunately, no. Most standard policies only cover water damage that occurs from the inside of your home (such as a busted pipe) and not water intrusion that came in at ground level from the outside.

Foundation

If you are having water intrusion in your basement, you may need to have your foundation checked. Foundation damage is only covered if caused by a storm, fire, or other event that is covered by standard insurance. Age, lack of maintenance, faulty construction, flood, and earthquake damage are not covered by a typical insurance policy. Just like flood insurance, earthquake insurance must be purchased separately. It is important to maintain your foundation, especially in older homes, as foundation repairs can be costly.

Sewer

Sewer repairs can also be costly. Though not typically covered, some policies can have a sewer rider added to cover sewer line breaks and back-ups. When purchasing a home, it is a good idea you have the sewer line checked for breaks, cracks, bellies (or sags), and blockages. Some home inspectors have sewer inspections as an optional add-on, and we always recommend it. If there are defects in the sewer line, we can negotiate with the seller to have them make repairs.

Find The Right Coverage

So, what should your home insurance policy cover? It depends on what risks your home comes with and what you can afford. Different parts of town come with different insurance needs and premiums – indeed, it can vary from property to property even within the same neighborhood. Once you find your dream home, talking to different insurance companies will help you better understand the risks and costs of insurance associated with the property.