If you are going to buy an older type home, the cost of purchasing the house would depend heavily on the value of the building. Inspections are the best way to find any problems that you may not see when touring the house. It is wise to have this done when you are buying a used home. The age and condition of the house, will allow the insurance company to put a price on the value.
These are a few problems that you may not see walking through the house, but there could be other problems, like the wiring that is not up to code. The insurance company could decline to give you home insurance because of the results of the inspection.
A few major considerations the Insurance Company would look for when they receive an inspection report.
- Wiring – The wiring in the house must meet company standards. An example would be if you have aluminum wiring or the house is running on a 60 amp service. It is usually frowned upon because of the amount of electrical use in a house. Forty or fifty years ago, there would be no problem because the electronics had not been even made at that point. If you take a look at what you use the electricity for, the electronics, like televisions, PVR, games like WII, stove, oven, vacuum, washer driver. It is a fire hazard these days to have a 60 amp. You should have a 100 amp or 250 amp system to avoid it overloading and catching fire.
- Roof – If the peeling of tiles on the roof could create water damage or actually start the rotting of wood. An insurance company can request that you have it repaired within a period of time after you purchase it.
- Water – Drainage from the gutters on roof. Continued water coming down at the side of the house, can cause foundation problems. Water damage can occur anywhere in the house. It can come from roof, windows, cracks in the foundation.
- Floors – any type of sloping that could be a sign the or floors rotting under covered floor.
- Structural Damage – Insurance underwriters would request a more detailed description of the situation before agreeing to insure the property.
- Security – The house should be doubled locked, one with a turn key and one that has a dead bolt and proper locks on the windows if they be opened.
- Stairs – Some insurers require a hand rail if the stairs are more than 3 steps. This doesn’t sound important, but If a visitor to your house trips and falls, you could have lawsuit.
If this is a newer house, you probably would not have many of the above problems. If it is an older home, the insurance company will request an inspection. If it shows any of the above issues, you can be denied home insurance, and/or they can request you have everything repaired. If you don’t have the repairs done, you will probably have to go to a High Risk Company where the premiums are very high.
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