When it comes to buying a new house, there's one rule of thumb that is pretty much universal: you're buying a bundle of someone else's problems.
Now this doesn't mean that your new house is falling to pieces, it just means that every home has its peculiarities that someone else has fixed, tried to fix, or just plain ignored. As insurance agents, we see plenty of homes come across our desks. Some better than the others, some...well, not so great. We've thought a lot about this and compiled our top three major issues that would make us walk away from a deal - or in some cases, not able to insure you at all!
3. Outdated Electrical System
A major component of insurance inspections includes a solid review of the electrical system of a house. Everything from the supply lines coming in, to your panel and wiring need to be checked, especially if your home was built prior to the mid-1980s. Aluminum wiring, Federal Pacific Stab-Lok breakers, knob and tube wiring, and low amperage service are all relatively bad ideas. You'll certainly want a qualified electrician or home inspector to check for these things before you buy. In terms of getting insurance; aluminum wiring and knob and tube will disqualify you from many companies, but isn't impossible to insure. Same with low amp service. Stab-Lok breakers on the other hand are practically uninsurable due to the fact they are not UL approved and have been responsible for so many electrical fires throughout the years.
2. Bad Roof
This one is pretty obvious - and insurance companies obsess over it (for good reason). Every insurance company approaches roofing differently but there are certain elements to a bad roof that you will just want to avoid unless you want to spend a good chunk of money fixing.
Things to look out for that we have seen include:
Lifting or curled shingles
Wavy or rippled spots
Completely missing shingles
Cracked or missing terracotta / stone
Leaking or torn membranes on flat roofs
Multiple layers of roofing
Cedar shake roofing (these get worn down incredibly fast)
1. Cracked Foundation
Our number one concern when we inspect a new home for insurance is the foundation. The foundation of your house is perhaps the most expensive repair you could ever make. We've seen estimates to fix small parts of foundations quickly escalate into the tens of thousands of dollars. Especially if the home is in close proximity to other homes, driveways, utility lines and other structures. Now, some smaller cracks are misleading: they are surface cracks and are quite common especially in the colder parts of the U.S. These can be easily fixed by yourself, a bag of $5 Quikrete and some exterior paint. You will certainly be able to tell the difference between a surface crack and a deep crack, but it's best to have a home inspector review all cracks before committing to buy.
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Taylor M Haines is the Vice President of Encompass Agency, Inc., an independent insurance agent in Buffalo, NY. He holds a Master of Science in HR Development from Buffalo State College(2016). Taylor has been in the insurance business since 2012 and writes all lines of personal and commercial insurance across five states. He focuses on insurance law and compliance, and advises several non-profit and government municipalities as well as provides worker's compensation resolution services to non-compliant businesses in New York state.