If you’re like most buyers, you have a list of “dream home” features that you’d love for your next home to possess. However, keep in mind when you’re house-hunting that many of those features you love will affect your home insurance premium. Here are three common dream home features that could drive up the price of your home insurance coverage—and what you need to know to bring that cost back down so that insuring a home doesn’t break the bank.
1. On the Waterfront
Who doesn’t want to live on the water? Whether it’s a beach, a river or a lake, waterfront properties are highly desirable. However, they’re also properties that experience the greatest risk for wind and flood damage. Insurers know this and often charge much higher rates for homes within these areas. For example, flood insurance is required if the home is located within Special Flood Hazard Areas — this is property that FEMA has identified as having a 26 percent chance of being flooded over the course of a 30-year mortgage. Adding flood insurance to a standard homeowner’s insurance policy can increase rates a few hundred dollars per year. Here are three tips for reducing those rates:
- Compromise: Look for a home near the water, but outside of the highest-risk flood zones. You’ll be only a quick bike ride or walk from the water, though you might not be able to see the water from your window. Your homeowner’s insurance rates will be much lower, and you can rest assured knowing that your home is much safer from coastal storms. Property values will be lower, too; take the money you’re saving, and put it toward a larger home, your retirement or whatever you’d like.
- If you must: Look for a waterfront home that comes equipped with storm shutters, roof straps (special hardware that reinforces your roof) and other protective features. Not only will your waterfront home be able to better withstand damage, but your homeowner’s insurance company may offer some special discounts.
- Research your district: A waterfront location may increase your insurance premiums, but being in a preferred fire district can help bring down your costs. Look for homes in a highly-rated fire district to help you qualify for a better policy.
- To search for waterfront by-owner properties: Visit our Advanced Search page, type in the ZIP code you’re looking for, and under the “Amenities” section, select “Lakefront” or “Waterfront.”
2. Pool Intentions
Another dream for many prospective homeowners is to have a swimming pool on the lot. But before you start dreaming about floating for endless hours in your own backyard, think about the additional costs and maintenance involved in owning a swimming pool. One thing you might not have considered (but your home insurance company has): You could be held responsible if a child trespasses on your property and gets hurt. Here are three ways you can reduce the extra insurance costs associated with an on-site pool.
- Compromise: If you can’t live without a pool, consider a home in a community where there’s a public pool. You may have homeowner’s association dues to pay, but they’ll surely be less than the cost to maintain and insure a personal swimming pool.
- If you must: Look for a swimming pool enclosed by a fence with a self-latching and locking gate. Check local codes for requirements to find out what’s required for optimal swimming pool safety.
- Add an umbrella policy: Swimming pools can be a major liability. On top of the liability coverage included in your home insurance policy, consider an umbrella policy. This will let you extend your home and auto liability protection by $1 to $10 million.
- To search for by-owner properties with pools: Visit our Advanced Search page, type in the ZIP code you’re looking for, and under the “Amenities” section, select “Pool.”
3. American Bungalow
Despite living in the twenty-first century, you may be drawn to the Craftsman cottages and American bungalows from the early 1900s. It can vary by insurance carrier, but homes older than 30 or 40 years typically don’t qualify for preferred policies, which generally carry lower premiums. The reason is simple: Newer homes with modern features are much less risky for providers. The roof, the home’s wiring, its heating, electrical and plumbing systems can all be issues. That’s why homes built within the past 10 years often qualify for discounts. However, if your heart is set on a vintage home, consider these three home insurance tips:
- Compromise: Look for a newer home built in an older style. You can get a new home discount without the headache of maintenance and restoration.
- If you must: Find an older home with electrical, plumbing and HVAC systems that have been updated to present standards. Make sure the roof has been replaced recently, as well.
- Look for a security system: If you’re paying a lot to insure an older home, look for a house with a monitored alarm system (or consider installing one). The discount—as much as 10%—might help outweigh the cost to insure an older home.
- To search for by-owner properties with security systems: Visit our Advanced Search page, type in the ZIP code you’re looking for, and under the “Amenities” section, select “Security System.”
Finally, don’t be shocked by the homeowners insurance price tag right before you go to closing. Shop around for rates on the homes you’re considering, so you can weigh that into your purchasing decision with all the information you need.
This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. The HomeInsurance.com blog serves as a resource center for insurance consumers across the country.
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