Home Insurance Articles

How Is Home Insurance Different For An Older Home Vs A Newer Home

2010-03-04

Buying a home is a major life decision, and the process can get pretty complex quite easily. In addition to negotiations, finding a trustworthy real estate agent, and investigating the property that you're thinking about buying, homeowners need to look for home insurance coverage. Home insurance is another major purchase, and many buyers don't spend enough time evaluating the pros and cons of different policies in order to make a good decision. You should ideally know as much about your homeowner's insurance as you can. Many buyers wonder, for instance, whether home insurance costs less for an older home or a newer home. The answer is that it all comes down to the property in question, but there are some general rules that tend to hold true for most properties on the market.

For instance, when buying home insurance, newer homes tend to have more up to date electricity, gas, and water lines, and this can make a significant difference. Some home insurance companies will insist on an inspection for these elements, and if they find signs of damage that could potentially result in a claim, you can expect high rates until you're able to fix the offending problems. Rates will vary heavily depending on the location of your house and many, many other factors, but any potentially dangerous elements of an older house can cause your premiums to skyrocket, and apart from that, they can be dangerous--you'll need to get them fixed as quickly as you possibly can.

However, don't just consider the cost of home insurance. Older homes are often located in more developed areas than newer homes, and as such the price of the house can be higher (and can be more likely to increase). This can easily offset the cost of homeowner's insurance over time. They also have lower property taxes, in general, and this is also worthy of consideration. Of course, it's important to upkeep older homes, and the aforementioned problems with electricity and natural gas lines can get expensive, so before you buy an older home, be sure to get a full home inspection from a licensed inspector. This could save you thousands of dollars in the long run.

Take every possible factor into consideration when buying a home, and keep notes to help you compare how home insurance will be affected by your home's age. Try to track every potential cost, including taxes, home value, etc. With the right approach, it's easy to locate the best possible deal, but you will have to do some work and take a balanced, knowledgeable approach.