What to look for in homes several decades old
There are many things to like about an older home, but sometimes dated construction presents unique insurance issues and concerns. If you are house shopping and looking at older homes, there are some things you can look for with regard to insurability.
I strongly believe that a home inspection by a qualified professional is a good use of your money as a home buyer, especially the older that the home is. This inspection will answer many of our insurance questions listed below. However, before reaching the point of paying for this inspection, you can also do your own pre-inspection while still in the screening phase of your home buying experience.
One of the first things an insurance company looks at is the age and condition of the shingles. Many shingles installed 15 years ago are beginning to defect, and there aren’t too many 20 year old roofs in our region that are still in good condition.
Many insurance companies may limit or reduce coverage for the shingles if they are older than 15-20 years. Roofs older than 20 years (or any roof in poor condition) may even make the home uninsurable with many carriers.
From the ground, carefully look over the visible shingles. Are they all lying flat or are any raised or curling at the edges? Is there moss or lichen growing in areas? Are there gaps where shingles appear to be missing? Do the shingles appear fresh and new or thin and weathered? Also ask the seller about what year the shingles were last replaced. (Your home inspector may also estimate this for you.)
The heating system
Not only will the type and age of the heating system affect your monthly budget as a homeowner, it may also affect the type and cost of insurance coverage you can obtain. And even more importantly, an old furnace can be a safety hazard. Insurance companies typically want furnaces to be no older than 25 or 30 years, with newer models preferred and often rewarded with a discount.
Many sellers can provide information on how old their furnace is. While walking through the home, you can also look for a label on the furnace saying when it was installed – or just generally look at how new it looks. Either way, your home inspection should provide you a pretty good idea of the age and condition of the furnace.
The electrical system
Most insurance companies will want to know whether the home is entirely on circuit breakers (desirable) or if it is partially or wholly on fuses (not as good). They may also ask what the electrical amperage is – at least 100 amps being desirable. More generally, if the home is older than 30-40 years, they often want to confirm if the electrical has been entirely modernized; so they may ask if a whole or partial update has been done and when.
When you tour the house, head down to the basement (if applicable) and find the breaker box. First, you are looking to see if the service is controlled by circuit breakers (which can be switched on and off) or if there are fuses (knobs which can be pulled out and replaced). Secondly, check for a stamped number on the main breaker (usually at the top) or on the main fuse which turns on and off the whole house – this is most typically the size of the home’s electrical service. From the basement, also look around and above you at the exposed wire to see if it all looks modern and in good condition and order.
As you walk around the house, look at the outlets to confirm if they are all modern three-prong. (Two prong outlets are a sure sign of outdated electrical.) Also, check kitchen, bathroom and garage areas for GFCI outlets. (They have on/off buttons on them, often with a small hole for a light.)
If your walk through or your home inspection finds old or outdated electrical, you should probably plan on budgeting for an update soon after buying your home. Not only is older electrical harder and/or more expensive to insure, but it can also be a safety hazard for you and your family.
The plumbing system
Water damage from broken or leaking pipes or plumbing fixtures is one of the most frequent kinds of Homeowners insurance claims, and these losses usually run in the thousands of dollars. So, if the home is older than 30-40 years, insurance companies often want to ensure that the home has modern plumbing throughout.
While you’re down in the basement, look at the types of plumbing that are visible. For water lines (the small pipes), copper or PEX (white, red or blue flexible plastic tubing) are the modern options. For waste lines (the larger diameter pipes), white plastic PVC is the modern material of choice. Metal plumbing lines other than copper are a sign of older plumbing. If the home doesn’t have a basement, you can also check under the sinks for pipe materials. Either way, you can also look there to see if fittings and connections appear newer and in good repair.
Exterior siding and trim
Many older homes have been meticulously maintained and cared for, but others may be generally in good condition but need a little TLC. While newer homes tend to often use low-maintenance siding and trim products, older homes were often sided and/or trimmed with painted wood. Over time, the paint may begin to paint and peel and rot can also occur.
Walk around the outside of the home looking closely at the condition. If the siding seems fine, pay special attention to the trim around windows and doors and under the eves – these are often the first problem areas.
Depending on the insurance company, a small amount of paint peeling in one or two areas may not be a deal-breaker, but the more condition issues you see, the more likely preferred carriers may balk at providing your insurance.
Other exterior condition issues
Insurance companies also look for cracks or crumbling in the foundation. They look for cracked, chipped or uneven steps or sidewalks. They are also going to look the condition of any outbuildings. Condition issues with the roof, siding or trim (or worse yet, sagging in the roof or walls) of a detached structure may not only make it hard to insure, it can even effect the willingness of a company to insure your home at all, depending on the carrier.
Choosing a home to purchase is a major life decision, and we hope that these tips give you some insight and allow you to be a more educated home shopper, at least when it comes to the insurance ramifications of the home you choose.
As an independent insurance agency, we represent a number of different insurance companies, with different guidelines and expectations as far as insuring older homes. While most of the issues mentioned above will have an impact on what carrier and rate we can offer, we are able to offer some source and level of coverage for almost any home, subject to some rare exceptions.
About the Author
Agent Ken Cobb
Ken is the owner and principal agent at Pine Country Insurance in Bemidji. Active in the insurance industry since 2000,Ken uses his years of personal insurance knowledge and experience to assist clients in customizing insurance coverage to fit their needs. Ken considers himself a "farmer" rather than a "hunter"; rather than focusing on writing a lot of new policies as quickly as possible, he works on cultivating long term relationships based on trust with his clients. When writing new policies and meeting for annual reviews, Ken spends time with his clients explaining and helping them understand their insurance, and he is also pleased to share his knowledge with his blogging audience as well.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.