Why Securing Home Insurance BEFORE Removing Conditions Is Important
If you’re one of our Buyer clients, then this will come as no surprise to you the value we place on ensuring you’ve secured adequate home insurance for your property BEFORE you remove your conditions. The insurer wants to know everything, and we mean EVERYTHING about the house you’re buying before they’ll agree to give you insurance.
Here’s why we think securing home insurance before condition removal is important:
- We don’t like surprises. Smooth, seamless transactions are how we roll. There’s nothing worse than getting a phone call from a panicked buyer two days before they’re supposed to take possession, and they can’t get home insurance because the rates quoted are too high, or the property doesn’t qualify. It makes for a stressful, unnecessary, & completely avoidable situation.
- The property is deemed “un-insurable” as-is. Yes, it may be insured now, but that doesn’t mean the insurer is willing to take on the same property with a new buyer, without making sure it meets their new requirements (think poly-B plumbing & aluminum wiring, to name a few). Yes, there are several homes with these items, and yes they’re all insurable (we’ll save our rant on these two topics specifically for another day), but in many cases, there are improvements the insurers require before activating your policy. For example, when aluminum wiring is present, insurers require copper pigtailing be done along with a submitted inspection report indicating the work meets the electrical code & acceptable practices. In most cases, all “concerning” insurable items/roadblocks are typically found during the inspection. By knowing what your insurers’ requirements are ahead of time, you could potentially negotiate the fix with the Seller prior to condition removal, rather than bear the brunt of the cost on your own.
- It’s the little things that add up. How old’s the roof? What about the furnace and hot-water tank? Oh wait, there’s a wood-burning fireplace in the house? You’ll need to get a WETT inspection for that too. Different insurers have different age caps on what’s acceptable for these big-ticket items. As a general insurance rule, the older the item, the greater the risk for failure & subsequent claim, and the more leery they may be to grant you insurance without some adjustments/upgrades completed.
- You’re in the fire/flood zone. We all saw what happened recently with the wildfires in Alberta, and the ripple effects it had in our area specifically (i.e. many insurers activated a “no new insurance” policy on any property within a 50km radius of the wildfire, during the peak of the fires). In most cases, there was not much that could be done, but having the time to research and seek out providers that were still offering insurance was a game-changer.