Insuring High-Risk Homes
Buying a home isnt just about the price range and the security of the neighborhood. Location is also essential to the home selection process. But while a beautiful home on the top of a cliff near the ocean might seem ideal, areas like these are prone to natural disasters, which make them harder to insure and to maintain. This brings up the problem of insuring high-risk homes.
Victims of annual or decennial natural disasters know the problems of insuring a high risk home, but only one percent of Americans have homes that are considered uninsurable.
This number may change, though, with the increasing frequency of natural disasters and the number of homes being built. To ensure that your home is safe and can be insured in the future, consider the location of the home, the homes appearance, and the price as starting points.
SEE ALSO: Why You Need Umbrella Insurance
Before You Buy
A full inspection of a home is absolutely essential before purchase. If you are not observant, or you do not hire a home inspector who is,
it could cost you in repairs and in insurance fees.
1. Check for water damage:
2. Check for foundation movement:
Foundation movement is a costly expense, especially for home buyers. Its always best to check the foundation of the home before buying. Indoor warning signs of foundation movement include:
- Inspect all water-using appliances for damage. Seeing them run can also help determine if there is a problem.
- Check the roof. If there are holes or cracks in the tiling, then there might be additional damage due to water.
- Check the plumbing for water or moisture.
- Turn off the water and look at the water meter if the homeowner will let you. If the water meter is still moving, water is still flowing, indicating a problem.
- Doors jamming or failing to latch
- Cracks on the walls, especially around doorways, windows, and where the wall meets the ceiling
- Cracks on tile (either vinyl or ceramic) over a concrete floor
- Windows wont close completely or will stick
Check for bulges or curves on the outside of your home, especially on concrete walls or block foundations. These can indicate major damage to the foundation.
In this case, using your best judgment is a good bet. If the house is at the top of a hill or cliff, it is at risk of slope failure and foundation movement
. So, while these homes do have excellent views, they are not your safest option.
3. Check for earthquake damage:
Also look at the exact location of your potential home on a map of potential hazards. The United States Geological Survey has a variety of resources for area investigation. To check your area, visit www.usgs.gov
SEE ALSO: Mudslides, Landslides, And Getting It All Covered
After The Fact
If you have already purchased a high-risk home, get the exact terms of your insurance.
Once you have done that, you can see exactly how much your insurance will cover in the event of a disaster. Often times, high-risk homes will need additional insurance, including flood and earthquake. Typically, these insurance programs are state-run, and will be found through a government insurer.
It is also important to repair minor damages as they occur
. Letting damages build up will only make your home weaker and less valuable