The Guide | Insuring your New Home
You will be making a number of phone calls prior to becoming the owner of your new home. Things like Hydro, Wifi, Gas, cable TV, or Canada Post. One of your most important tasks will be lining up home and content insurance.
You require insurance for the completion date. This is a day that the insurance between the Seller(s) and Buyer(s) overlap. It's a good idea to make inquiries early on if you have a specific Bank, Credit Union or Insurance company you favour. Often this is something you do during the process of due diligence before lifting your conditions.
We will check the homeowner has a current policy in place but cannot guarantee you will get one with your chosen provider. Insurance companies have different policies. For example one lender might not insure a home with polybutylene plumbing pipe (“PolyB”) because it reacts with the oxidants in tap water, it becomes fragile, occasionally scaling or flaking. This results in the fracturing of the indoor surface area of the pipe, which permits even more degeneration. Ultimately the pipe may leak, causing water damage. Another lender's policy might simply charge a small premium if the home does contain Poly B.
Another example is that some providers will not insure if the homes hot water tank is more than 10 years old while other companies will simply say replace it in 30 days and provide proof, no problem.
Some factors to consider when insurance changes hands;
If the home has a wood/pellet burning fireplace or stove insurance companies will need a current (within 2 years) WETT wood energy technical transfer certificate. The homeowner does not need to provide this. If you choose not to have a qualified inspector check the components and provide a WETT certificate the insurance provider may ask you to board up the hearth or remove the wood stove until you prove that all components of the system meet code and are in proper working order. *note homes with tenants and wood burning heat source cost a premium.
Proximity to a fire hydrant. I found out that because we live in a rural area more than 1 kilometer from a fire hydrant it costs me $1000 more per annum for insurance on our newish home. Can't change that, make inquiries at the local firehall - staff are friendly and happy to answer questions.
If you purchase a home during the fire season in British Columbia specifically in our region consider some companies will not provide home insurance while there is an active forest fire within 50 kms as the crow flies. No insurance, no mortgage. Protect yourself from heartache or potential litigation for penalties associated with not completing your purchase because you didn't call and secure your insurance policy in advance. You can pre purchase your insurance binder and once you've paid for it they can't take that away. Even if it's a few weeks or months down the road, pay for your policy early to avoid disappointment.
Age of the home may be a major factor with insurance. Homes built prior to 1950 are tougher to insure especially if they have post and piling construction or partial foundations. You can find providers, but may not be able to get the policy at the first or second place you shop for coverage.
Buried Oil Tanks may be on the premises. Older homes may have or may have had an oil tank above ground or in a basement/crawl that was easily accessed and can be recycled locally for free. If it was found that a home had a buried oil tank it would be difficult to insure. Best practice if you are unsure is to pay the extra inspection fee to have a company scan the property for the presence of a buried oil tank. In my personal experience we found one hidden by careful inspection of a crawl space. We found a small copper line in the foundation wall which could have been easily missed even by a home inspector. There was no evidence inside the home it had ever had forced air heat. I asked the listing agent to ask the executor of the home for more information which they could not provide since they didn't live there. The local fire department doesn't keep comprehensive records on homes with oil fuel tanks. The clients paid for the scan which revealed the buried tank. The seller paid for the removal of the tank and all associated costs so we could get insurance.
Previous history or claims at a residence, disclosed Marijuana grow operations, Asbestos or Hazmat, short term accomodations like Air BnB, your previous insurance history (claims), and many other factors may affect your cost and ability to work with certain providers.
We are not licensed professionals in in insurance so are not experts so we ask you to make inquiries and seek independent advice from a qualified insurance agent.