Home insurance costs are calculated on numerous factors that include location, the profile of people living in the house (e.g. smokers), home use (e.g. an AirBnB, basement rental suite), dwelling type, house specifications (e.g. size, structure) and more. You cannot influence many of these factors, but while searching for your ideal home, you should pay attention to the hazardous things that will increase your insurance costs.
Today InsurEye, a consumer-driven platform that offers, among other services, home insurance quotes and independent consumer reviews for insurance, shares a list of things that could increase your home insurance rate.
Group #1: Structure-related elements
Wooden Frames are considered more hazardous than the masonry frames used before the 70s, or today’s brick and concrete frames. The concrete frames are more common in high rises and other similar constructions.
Wood shake or shingle roofs: Insurers pay attention to the age of the roof (or when it was upgraded) and to the roof type. The riskiest roofs for insurers are wood shake and shingle, since they deteriorate quickly and are more prone to leakage and damage. If your roof is in bad condition, an insurer can refuse to insure your property.
Older wiring types: There are two types of wiring that insurers don’t like:
- Knob and tube wiring is considered very dangerous. It is commonly found in older houses and uses knobs to keep wires isolated. Insurers often require a complete rewiring of knob and tube systems before offering an insurance policy.
- Aluminum wiring is not on insurers’ favourite lists either, as it may overheat and cause a fire. Often, you will need to get a certified inspection before insuring your dwelling with this type of wiring. Rewiring may be required.
Galvanized, lead, Poly-B or Kitec pipes: Similar to wiring, there are a few types of pipes that insurers do not like:
- Lead/galvanized plumbing is found in houses built before the 60s. These are steel pipes covered with zinc. That can lead to corrosion buildup.
- Kitec or Poly-B plumbing: These are more modern pipes that were used in the 70s and 80s, and these are known for their design shortcuts. Kitec and Poly-B pipes are more likely to leak and burst.
Group #2: In-house features
Wood stoves: If your future house has a wood stove, expect some issues with your insurance company. Wood stoves are considered a dangerous fire hazard and often require an inspection through a licensed specialist. Another danger associated with a wood stove is the potential for carbon monoxide poisoning if there is not enough ventilation.
Oil heating: This type of heating is considered hazardous due to the environmental danger associated with cleanup if there is an oil tank leak. The cost can easily run into the thousands, especially if oil seeps under a building foundation.
Finished basements: Basements (especially finished ones) increase risk exposure for a house since that’s where most of the plumbing and flooding issues will cause damage. If you have a pipe burst or a sewer backup at home, the basement will likely suffer the most. Also, in the case of overland flooding, water will enter your house through the basement. Should you have a finished basement, the repair and restoration costs increase significantly.
Home office: Using your home as your office comes with a few risks, thanks to business property that you store in the house (computers, printers, scanners, product samples) along with extra liability if you have clients visiting you at home. Insurers will assess what kind of risk your business poses and will add additional premiums on top of your home insurance rate.
Group #3: Outside of your house
Swimming pools are seen by insurers as a higher risk because there is a chance somebody could drown (and that could also result in an expensive lawsuit). Insurers price these risks accordingly. You might also face additional requirements before insurers agree to cover you, such as fencing your swimming pool to minimize the chances of an accident.
Landscape and trees can drive up your insurance costs if you want to insure your landscaping against damage. It is important to know that insurance covers live trees only, not dead ones. As per the Insurance Bureau of Canada, home insurance policies will often allow you to apply up to 5 per cent of your insurance to fix damage to your landscaping and live trees.
Pay attention to these factors when searching for your dream home so you can save hundreds of dollars in home insurance costs annually; and remember, if you are getting a condo insurance quote, there are different things that will matter, such as condo upgrades, your contents, and special assessments through your condo corporation.
Good luck in your home hunting!