Shopping for a Home This Spring?Consider Insurance Implications, Advises The I.I.I.
Insurance Information Institute Offers Home-Buying Checklist

NEW YORK, April 14 - Spring traditionally is the busiest time for home buying. And with all-time low interest rates possibly increasing later this year, some consumers will likely jump at the opportunity to buy a home now.

Along with learning about interest rates, points, property taxes and school districts, homebuyers should consider the insurance implications of purchasing a specific home, the Insurance Information Institute advises.

"In the frenzied excitement of buying a home, it is important that consumers ask a number of key questions about securing financial protection for their most valuable asset," said Jeanne M. Salvatore, vice president, consumer affairs at the I.I.I.

A home that is located in a flood zone, for instance, will also need to be protected by a separate flood insurance policy, which can add several hundred dollars to the cost of insuring that home each year, pointed out Salvatore.
If you are interested in a particular home, it is also important that you ask the owner for a copy of the house's claims loss history, such as a CLUE report from ChoicePoint or an A-plus report from the Insurance Services Office (ISO).

"Getting a copy of a home's loss history provides powerful information to a potential buyer," said Salvatore. "These reports provide information on the number and types of homeowners insurance claims filed by the home's owner going back five years."

For example, a home with a number of water claims may indicate a plumbing problem that should be corrected before purchasing the house. At the same time, claims data can also provide positive information about a house. A buyer would be pleased to learn that, for instance, windstorm damage resulted in a home getting a new roof, Salvatore said.

When shopping for a home, keep in mind that where a house is located, the type of construction, and the condition it is currently in will have a dramatic effect on what you pay for insurance. The I.I.I. suggests that you consider:

• Age of the house
  Older homes sometimes have special features such as plaster walls, ceiling moldings and wooden floors that could be costly to replace. Such special features may raise the cost of insurance.
• Plumbing, heating and electrical systems
  The older the systems, the more susceptible they are to disasters such as fires or water damage. If they have recently been upgraded, however, not only does it make the home safer but more "insurable."
• Quality and proximity to fire department
  If you buy in a community that has a fire department with a top rating, and full-time firefighters, insurance premiums will generally be lower.
• Disaster-resistant products
  Homes that are built with disaster-resistant products such as hail-resistant roofs and windstorm shutters may be less costly to insure.
• Location
  Where you live has a bearing on what you pay for insurance. If you live near the coast or by a river, depending on how many feet you are from that body of water, determines your premiums. Consider the risk of living in an earthquake-prone area, since this disaster, just like flooding, would require a separate policy. Living in dense, wildfire areas may also cost more to insure.

"Potential home buyers should also take the time to check their credit history to make sure it is accurate. Good credit can help you secure a mortgage at a good rate and, depending on the state and insurer, it may save you money on your homeowners insurance," said Salvatore.

To help consumers ask the right questions when shopping for a home, the I.I.I. has compiled an Insurance Checklist: A Guide for Home Buyers, available at www.insurance.info/static/img/brochures/homeowners_checklist.htm. Additional insurance information can also be found on the I.I.I.'s website at www.iii.org.

The Insurance Information Institute is a non-profit, communications organization supported by the property/casualty insurance business.