Buying an older home can bring with it some up-front costs you might not experience when buying a newer home, depending on how much damage or deterioration the older home has seen in its life. As a general rule, older homes also present a higher risk factor to insurance companies, so another up-front cost you likely will have to deal with is a higher premium rate on your homeowner's insurance coverage.
Though this higher premium rate for your particular older home may not necessarily be the case, since all homes and homeowner's insurance policies are different, it's true more often than not. Here's why:
- Certain systems within an older home may be outdated and require replacement in order to bring it up to codes and current safety standards. This may include the plumbing and electrical systems, which would both be expensive to update to today's standards.
- Older homes may have certain physical hazards due to their old age such as foundation problems or the need for roof replacement. They may also be plagued with health hazards such as lead paint, asbestos and mold.
- Certain older features like hardwood floors and plaster walls may be difficult and expensive to replace. If your older home is included within the National Historic Register, this will almost certainly increase the cost of your homeowner's insurance.
Two Important Tips for Buying Homeowner's Insurance
The number one rule for those shopping for insurance, any kind of insurance, is to get multiple quotes that will allow you to comparison shop. Using an independent broker with access to numerous insurance providers is an easy way to do this, allowing the broker to do the groundwork and present you with multiple options from which to choose.
Always look for discounts. Sometimes, you'll have to ask about available discounts to find out about them. Often, insurers have lots of discounts they can provide to qualified prospective customers.
Special Tips When Insuring an Older Home
Some things that may be standard in most modern homes could be missing in older homes and should be considered in order to upgrade the home and lower your home insurance rates. Consider the following:
Installing smoke alarms and carbon monoxide detectors can sometimes lower insurance costs by as much as 10%.
Dead-bolt locks, sprinkler systems and monitored burglar alarms may all help lower insurance rates on older homes.
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