Peter's Blog

Pfanntastic Home Buyers Handbook  Chapter 8 F

Subject to Obtaining Property Insurance

 In our journey towards buying your 1st home, so far we have covered.

• A broad overview in buying your 1st. Home
• Location, is Everything
  
• Selecting a Realtor
• Preparing to View Homes
• Watching the Market
• Financing Options
• Finding A Lender
• Getting (Pre) Approved for a Mortgage
• Making and Offer
• Making an Offer in Different Conditions
• From Contract to Closing the Deal
• Working on the Subject to Financing Condition
• Woking on the Subject to Home Inspection Condition
• Working on the Subject to Title Documentation Condition
• Working on the Subject to Seller Disclosure Documentation

Please review the previous chapters for more details in our Pfanntastic Home Buyer Handbook Series, and or contact Peter of Linda Pfann.

Wow, we have come a long way already, and there are only a few more subject clauses that we have to work on to make sure that you will get your new home in the way that you deserve.

Congratulations on getting this far and on your perseverance, Peter and Linda Pfann are here to answer any and all your questions, if you have any remaining questions on any of the topics covered so far.

In today's chapter we will touch on the typical home owners insurance coverage for your new home.
For many years it was almost a none issue, buyers would make an offer, and a few days before the moving day would visit their local insurance agency and provide a few property details and the insurance was done.
Not anymore.......Property Insurance is no longer a simple rubber stamp situation, as we have hinted to in earlier chapters. Insurance companies have had major property claims over the last 2 decades, and as such the insurance industry has made it much harder to obtain the right insurance for your property, with many more limitations, restrictions and exclusions.
Hence it is very important to spend a little time and attention on making sure you get the right coverage at this time.

Property insurance (fire, liability, revenue, flood, earthquake etc) some of which is required by all mortgage companies if you buy a property and use a mortgage to buy they property. No Insurance, No Mortgage funding, it is that simple. In most cases, you will find that provided that the property is in reasonable conditions and good mechanical and structural repair that getting proper insurance coverage is not going to be a major problem.

If you are buying a Condominium and or Town-home the property insurance will already be in place by way of the strata corporation and you have no options for it, but you will still need some form of liability insurance as well as your personal belongings.
If you are buying a 1/2 duplex, again the property insurance will be in place and cover both sides of the duplex (this is a requirement under the strata property act). your liability and personal belongs would still be your own responsibility.
If you are buying a single family home, than you are going to have to arrange for all the insurance coverage with your insurance agent.

Insurance agents will typically ask for and require copies of the MLS print out and sometimes additional details about the purchase (price, dates, warranties, included items etc). In and around Victoria BC, where we have many older homes, it can also be a requirement that the insurance company want a copy of the property inspection report for their review.

Currently it is not uncommon for insurance companies to require the buyer and or seller to either make repairs or improvements prior to the completion of the sale or within a short period of time after you move into your new home. Typical areas of concern are:

• Age of the Roof
• Electrical Wiring (knob and tube as well as aluminum)
• Electrical Service capacity
• Wells and or Septic Systems
• Heating Systems
• Oil tanks (inside, outside, age, underground etc.)
• smoke detectors
• how remote the location of the property is
• use of the property (revenue, boarding etc.)

The above list is just some indication of areas that insurance companies will want or need to receive clarification about before offering you  insurance coverage. As there is no such thing a one size fits all insurance policy, it is very important to review and fully understand the policy being offered and what is (and equally important what is not) covered.
We do not proclaim to be experts about property insurance, but we have seen enough issues and problems if and when a claim is filed that we fully understand that many home owners under-estimate the importance to have not just the right amounts for coverage in place, it  is equally important to ensure that the policy that you decide on offers coverage for the right uses and purpose.

To give an example, in Kelowna BC a few years ago with all the forest fires, there where homes that had been protected from the fire by keeping them wet...... and in some cases the owners ended up not being covered for the "water damage" as being caused by the owners and not a mechanical error or accident. Many have heard about the massive insurance issues around the Hurricanes in the southern states in the USA, and how insurance companies in many cases avoided to pay out claims.....

My Dad referred to insurance as an umbrella for when the rain is the worst, but he would always add "just make sure that your insurance company does demand their umbrella back when the storm begins....."
Insurance companies are an essential component of the home buying team effort, making sure that you have the right coverage at the right time and price is not as simple as it use to be, finding a great insurance agent is a good way to make that process much easier.

Time is of the essence when dealing with all the subject clauses, and we know from past experience that insurance companies often are a very slow moving machinery, so it is important that once you have an accepted contract in place, that you contact your Insurance agent and get the wheels in motion as soon as possible. If your Agent needs property information and or details be sure to have them contact Peter or Linda Pfann (250) 213 9490, or info@pfanntastic.com and we get them everything needed to confimr your property insurance in a timely fashion.
The last thing we want, is come to the very last moment and have to start pushing the insurance companies for them to get stuff done (it just won't happen).

As mentioned in most cases obtaining the correct property insurance is still relatively straight forward, but one should never assume that your home insurance is in place until you have received confirmation from your insurance agent.

Peter and Linda Pfann are here to assist, guide and consult with you to ensure that your best interest are protected, please contact us with any and all questions or concerns so that we be able to avoid any nasty surprises for you.

As always, if you have any questions, concerns or would like to explore your options, be sure to Talk To Peter or Linda Pfann, we will ensure that our 25+ years of client focused results will benefit you.

Visit our Website for additional resources www.pfanntastic.com