There has been growing concern in the real estate industry about the escalating cost and availability of property insurance. REALTORS have provided anecdotal evidence that insurance companies have refused to insure homes that have been previously covered. In other cases, companies have decided to raise insurance premiums by a considerable amount. Some properties involved in insurance coverage issues have real or perceived environmental problems, such as oil tanks or mould. Other insurance issues develop because of outdated wiring or heritage status.
A number of home insurance issues have been identified that can impact the transaction process. These issues can include:
- Aluminum wiring-demands to retrofit and/or change completely to copper
- 60 amp electrical service-not deemed to be sufficient regardless of the size of the dwelling
- knob and tube wiring
- gas furnaces more than 20 years old
- oil tanks
- wood burning appliances-WETT certification is being measure against current building codes
- first time home buyers without prior home insurance history
- insurability point system now used by insurers which may be detrimental to first time buyers. This included “red zoning” because of the location of the property.
CREDIT SOURCE: Peter F. Holgate, Broker/ Previous Manager, Right at Home Realty