What’s New in Homeowners Insurance and Why it Matters to You?

August 23, 2023 | Buying a Home | By: The Goodhart Group

The realm of homeowners insurance is experiencing significant changes, and as a real estate buyer, you should be privy to them. Let’s dive deep into what every aspiring homeowner needs to know. 

From Old to New: The Evolution of Homeowners Insurance Policies

Traditional Factors (Old Criteria):

  • Sales Price as a Yardstick: Previously the sales price of your home largely determined your insurance premium. Now there are many more factors. 
  • Emphasis on Construction: The type of construction material used to play a significant role in determining your cost. It still does, but it is no longer the most important factor.
  • Claim History: Only past claims were considered in policy determinations. Now current claims are also important. 

Emerging Trends (New Criteria):

  • Satellite Scrutiny: Insurance companies are employing satellites to photograph homes, paying special attention to tree coverage and staining/aging. If they spot trees overshadowing your house, they might insist on their removal, or if they spot damage they will insist upon repair. .
  • Adapting to Climate Challenges: Recent severe weather conditions have strained many insurance companies, leading them to alter their terms. This means they might drop clients with roofs over 15 years if they’re not replaced or clients who lodge more than two claims within three years.
  • PITI Impact: Many buyers reel from the shock when their monthly mortgage payment spikes. This unexpected hike can often be attributed to rising homeowners insurance premiums and inflating real estate taxes. 

Empowering the Buyer: Steps You Can Take

  • Insurance First, Offer Later: Always investigate insurance options before making a purchase offer if you can! We recommend researching homeowners insurance during the home inspection period. This proactive approach helps in gauging and comparing the most competitive rates available.
  • Time is Essence: For luxury homes priced above $1 million, ensure you allow at least 30 days to secure an ideal insurance policy. The high value homes underwriters are being very cautious about taking on new properties. If you want to shop for the best options the more time the better. Approvals that used to get done in a day are taking a month – the big insurance companies are asking for pictures of: circuit breaker boxes, hot water heaters, proof of roof ages, etc.
  • Insurance companies like brick construction. Fewer problems with dented or blown off siding. 
  • Many insurers are now wary of homes beyond a particular age. If you are buying a home over 100 years old, check with your insurance company about the cost to insure before ratifying the contract.
  • Smart Budgeting: It’s essential to budget for potential insurance costs even before zeroing in on a house purchase. Although lenders play a pivotal role in your home buying journey, they seldom offer advice on homeowners insurance. Their primary concern is ensuring the insurance policy stays within a stipulated budget.
  • Insurance Wisdom: Use your claims judiciously, reserving them only for significant, unexpected events. Lodging more than two claims within three years can peg you as a high-risk client, leading to potential policy termination.
  • Independent is Best: It’s prudent to opt for an independent homeowners insurance company, one that will engage in a candid conversation about your needs and craft a bespoke policy for you.
  • Tailored Solutions: Consider opting for higher deductibles or bundling various insurances for more favorable terms.

The Bottom Line:

As the homeowners insurance landscape undergoes rapid transformation, being informed can make all the difference. Taking charge of your insurance needs ensures a smoother and more transparent home-buying experience.


For more on homeowners insurance check out the below blogs from our friends at Kinneman Insurance.

Roof talk: https://www.kinnemaninsurance.com/blog/roof-talk-from-virginia-kinneman.aspx

Industry update: https://www.kinnemaninsurance.com/blog/industry-update-from-virginia-kinneman.aspx


We have great recommendations for homeowners insurance – reach out today if we can help!

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