Homeowners Insurance Question
Hello. We are considering buying a property to fix-up and re-sell. It was ubilt in 1927, it has galvanized piping and older fuse boxes.
Has anybody been successful getting an insurance at a reasonable cost on a property like that?
I appreciate your help,
Alexander.
First of all, do you really mean homeowners insurance policy? To qualify for a homeowners policy, it must be owner occupied. If it is simply an investment property, you'll need the proper form, which would probably a dwelling fire policy of some sort.
Second, the items you brought up are simply for underwriting purposes, but yes, they will want to know that information. Find out from the sellers if the property has had even a partial update in the plumbing/electrical systems. For instance, if the pipes are still galvanized, but maybe some plumbing was redone in the bathroom, then that was a partial update. Find out what year. If the kitchen was remodeled, and they redid the wiring in that room, then that is a partial update. Find out what year. The key is to only answer the question being asked. If the insurance agent asks if the electrical system has been updated, the answer would be, "yes". Not, "It still has circuit breakers". Only give that info if asked. This usually works for me...
Of course, any good independent insurance agent should have a non-standard market for those sub-par risks that make good rehabs. So if absolutely nothing has been done since 1927, a good agent should still be able to find you coverage...
I'm not saying lie. Sometimes, especially in insurance, you simply need to be, "strategically ambiguous"!
I went throught the same thing a year ago when I purchased a 1890's home. I called everyone and they wouldn't insure a house that old. Finally I just went to a house in the neighborhood in simular condition and age and asked the owner who they used.
Good luck!
Rentalman,
You were absolutely correct. Be careful though. Your insurance agent may ask or word something different than what's on the insurance application. Be careful to "read" the application for such questions.
It would much better to pay the higher priced premium and be properly covered than try and go the cheaper route and "fib" just to get a claim denied for misrepresentation. Just my 2 cents.
Ican,
Good advice, and something I do w/out even thinking, so thanks for bringing it up. You are absolutely correct, always read the application.
I have noticed that on the standard "acord" application for dwelling fires, the form that my independent agent uses, It asks for updates to the plumbing, wiring, and roof. There are two columns, one for full update, and one for partial. So, when my agent asks me for updates, and I know the bathroom was remodeled 6 years ago, my answer would be, plumbing, partial update, 1997.
Many companies will look harder (and favorably) at updates than simply the "age" of the property.