Just got pre-approved for a home loan? Congratulations! That’s a huge step in life – and it takes you so much closer to living the Canadian Dream!
Finding and buying a new home is as exciting as it is stressful: The purchase of a home is a huge undertaking that requires a good deal of forethought and research. But once the fun part of finding your dream home begins, you’ll find yourself spending evenings and weekends driving about town with your real-estate agent, and wandering through what might become your home. And at night, you dream about paint colors and furniture arrangements…
When you find it, you know it. And then everything happens quite fast: Your agent might help you sign the paperwork, you put in an offer, and then you wait, chewing nails, to hear back whether it was accepted. “Hurry-up and Wait” is probably a good way to describe it.
Insurance may not be your first thought when you start thinking about buying a house. But don’t let it be your last! Call your team at Lackner McLennan and Erb and Erb Insurance Brokers. early-on to avoid unpleasant surprises and save money. We can help you make this process as smooth and stress-free as possible. Simply follow this short checklist of house-buying tips that you should be aware of, from an insurance point of view:
- Choose your own insurance.
- How far is the nearest fire station?
- Don’t get bounced by a trampoline (or pool).
- Part of a homeowner’s association? Check your association’s Master policy.
- Located in a flood zone? You might need flood insurance.
Choose your own insurance
Your offer was accepted and now the real paperwork begins. Who would have thought that would be so many documents to produce, papers to sign, and questions to answer? When your broker assures you that she can take care of the rest, it’s easy to agree.
It’s a couple of months after you’re moved in that you have the peace of mind to take a closer look at the papers…and discover that your homeowner’s insurance rates are high. Very high! To say the least.
Just like property taxes have become commonly rolled into an escrow account and made part of a mortgage payment, so have homeowner’s insurance payments. Every lender requires that you have homeowner’s insurance in place. But that doesn’t mean that your mortgage company has to determine your insurance!
We can help you find the right protection at the best rate for your new home. All you have to do is get us involved early. Follow this short checklist, and with your permission, we can process everything so much faster when the closing date comes. Keep in mind that deadlines are always tight in the mortgage business.
How far is the nearest fire station?
You’ve always dreamed about a house in the woods. Kind of out there, away from all the hustle and bustle. And you found it, the perfect home, on a perfect 5-acre lot, not too far away…but far enough.
However, as you receive your homeowners insurance statement, you swallow hard. The house isn’t that big…actually, it’s about the same square footage as your previous house in the suburbs. So why did the rate increase?
The distance of the nearest fire station has an impact on your homeowner’s insurance rates. The further away the nearest fire station is located, the higher the rate. This makes sense, in a way: If, heaven forbid, you ever had a fire, every second counts. With no fire department nearby, the risk for a major or total loss of your home is much higher. And insurance companies charge for higher risk.
Just a piece of information to be aware of as you search for your dream home. For detailed rate quotes and more information about potential insurance rates for a house you’re looking at, just give us a call. We are here for you!
Don’t get bounced by a trampoline (or pool)
Now this house is really great! Not only does it come with a big yard and a swing set, but it also comes with a trampoline! Or maybe it’s a pool! The kids would love it! Unfortunately, the backyard isn’t fenced, but…well…a fence could be added later, plus the row of trees provides some privacy.
This doesn’t sound bad at all, does it?
Unfortunately, from an insurance standpoint, it does. There are an hundreds of thousands of trampolines in Canadian backyards, and injuries caused by trampolines are steadily on the rise. Many of the injuries involve children aged 14 and younger. Severe spinal cord and head injuries abound.
That’s why it is very difficult to find insurance for a trampoline. If the trampoline is located on your property and somebody – invited or not – gets injured while using it, you will be held responsible for the damages. That may mean many years of medical payments, or worse.
A trampoline is considered an “attractive nuisance” or an ‘allurement’. Most insurance carriers have recognized the dangerous risk exposure that comes with a trampoline. Some carriers will not write a homeowner’s insurance policy for a home with a trampoline. Others may write it only if the trampoline is inside a 6-foot fenced area with a self-locking gate. Swimming pools are also considered “attractive nuisances” and are treated similarly. Some insurance companies will not insure a home that has both a pool and a day care.
Part of a Homeowner’s Association? Check your association’s master policy.
Living in a homeowner’s association can have its pros and its cons. But the fact is that more and more condo, town-home, and other communities are bound together by a Homeowner’s Association. For each homeowner, that usually means an annual fee.
What does the homeowner’s association have to do with your insurance? Quite a bit, actually: From an insurance standpoint, if anybody got insured on the association’s joint property, such as, for example, a walkway or a playground, the association would be held liable. That’s why each homeowner’s association has a Master policy in place. The question is: What does the Master policy cover?
Some master policies don’t provide high enough protection, so if a loss occurs that exceeds the policy limits, each homeowner in the association will share an equal part in the liability. In that case, you may be required to pay a share of hundreds or even thousands of dollars.
If you don’t have the right protection on your homeowner’s insurance, that money would need to come out of your pocket. Luckily, your homeowner’s insurance can be adjusted to provide you with adequate protection.
We can help you with that (and we can also help in checking your association’s Master policy). Give us a call 519.579.4270.
Located in a flood zone?
Isn’t the sound of water one of the most soothing? Whether it’s rainwater drumming on your window, waves crashing on the beach, or a stream babbling away…Not to mention the view! To look out the window and see these sights is priceless.
A house near a river or the beach is a dream for many. But if that dream home is located in a flood zone, you best be prepared to pay for any damage to your property as a result of floods. In Ontario there is no flood insurance available for homeowners.
What we can provide is sewer back-up protection so that if water floods up through your plumbing into your home you have coverage.
(PS: That said, with the weather patterns in recent years, sewer back-up coverage is a smart idea, even if you live nowhere near a flood zone. Talk to us to learn more.)
Disclaimer
Lackner McLennan and Erb and Erb provide these informational articles to educate the public about insurance and investment related matters. This article does not substitute for broker advice regarding your specific insurance or investment needs. For a comprehensive strategy to tackle what you, your family, or your business, may need we invite you to speak directly to a broker who can guide you through all the options available to you.
