Insuring an Older Home
I think all of understand the appeal to living in Historic Charleston, SC. Charleston is considered by many historians to be the second most historic city in the United States only behind Philadelphia. In fact many of the original founders of our country owned property here, and visited our beautiful city regularly. Living in a home built in the 17 & 1800’s has it’s obvious charm, but there are some things one needs to consider before pulling the trigger on an historic home.
In the insurance industry an older home is considered 40+ years old. Yes; only 40 years old. But when you think about it; it makes sense. Insurance is all about risk, and building code changes every few years. So; for a home built 40+ years ago the building codes would have changed many times. Those old codes have resulted in millions of dollars in paid out claims.
When buying a home in a coastal town, insurance should be a very important factor as it can be a very hefty expense. There are many more risks that have to be considered living near or on the coast then living inland. The obvious being wind from hurricanes and the second being flood risk. Buying an older home isn’t out of the question, but there are some things to look for. One; ask your realtor to only show you new homes or ones that have been renovated and brought up to current code recently. This will solve most of the problems of homes 40-80 years old. Remember this; you MUST provide proof that work has been completed by a licensed and bonded professional who will sign a form attesting to the completed work. If you buy or already own a home that is 40+ year old and the work hasn’t been done here are somethings you can do to reduce your premiums.
However, as scary as those perils maybe, the age of construction maybe be even more. The risk of a hurricane only comes a couple times a year, and depending on where you live the risk of flood isn’t something most have to be concerned with very often. But everyday your home’s age is a factor. Old wiring, old plumbing, old roofs, and old foundations get older everyday.
Most insurance providers will not even cover a home over 40 years old. So if you are looking to buy a home 40+ years old one needs to shop insurance and get some quotes first to see if they can even find coverage. When you do find a provider be prepared for it to be most likely more than double what you would expect for a newer home. The cost of your insurance could also make getting a loan approval difficult due to it increasing your debt to income ratio.
If you are buying a historic home, well let’s put it this way your insurance bill each year could be well over $8000+ a year, and finding it will be difficult.
In conclusion, buying a new house can be exciting but just remember it also has to be insured and with the proper knowledge and help hopefully insured afford-ably.