PRIVATE CLIENT
From Roof to Roots
Summer Home Buying and Insurance Essentials
As the days get longer and the air starts smelling like fresh-cut grass, it’s hard not to get excited about all the possibilities summer brings. What’s at the top of many people's lists? House hunting.
But before we dive into all the fun stuff, let’s have a real talk about something slightly less thrilling but very important: insurance.
Insurance Companies are Getting Picky
Thanks to all those wild weather patterns we’ve been seeing, insurers are scrutinizing every home’s details to decide if it's insurable. Choosing a house in today’s insurance landscape requires more homework than ever, as even the smallest home characteristics can have a big effect on your insurance profile. With more providers exiting the Private Client Insurance marketplace and middle-market groups (like State Farm, Farmers, etc.) being downgraded in their financial solvency by rating agencies such as AM Best, working with an insurance advisor who knows where and how to insure your home is more important than ever.
It’s not just about the house itself; they’re reviewing your claims history, too. As soon as you start browsing open houses, it’s critical to take proactive steps to boost your insurability profile and start prepping your insurance strategy.
Strategies for Savvy House Hunters
So, what should you keep an eye on when you’re house hunting? Here are a few important considerations:
- Roof Check: Aim for homes with roofs younger than five years. Most insurance carriers now require significant documentation for homes with roofs older than five years. For any roof older than 20 years, they will typically decline terms or mandate replacement. Know before you go because your insurance options may be limited.
- Water Woes: Steer clear of places with a history of water damage. With that said, if a potential home had prior water damage that was well mitigated, that’s okay. When you move in, you should install an automatic water shutoff device that helps reduce the risk of water loss. Plus, most carriers offer a premium credit of 5-15% for the installation and activation of these devices.
- Fire Safety: Look for homes with a good distance from brush, trees, and flammable materials. Whether you live in the country or the city, you don’t want branches cozying up to your house as those can pose a danger to your roof and structure.
- Renovation Reality: Even if you’re only planning cosmetic updates, you still need to ensure the structural integrity is solid. Keep in mind that big fixes or major renovations might require extra insurance, which is called a builder’s risk policy.
And the most important part? Make sure the place feels like home. As the market settles and rates become more steady, you will likely have more options. We aren’t in the wildly competitive real estate environment of years past, which means there are more opportunities for buyers.
Ask the Right Questions – And Ask Them Early
When it comes to working with your real estate agent, here are some key questions to ask:
- What will their negotiation approach look like if the house has major issues?
- Can they loop in a CCIG insurance advisor early to review the house’s insurability?
- Will they ensure thorough inspections to dodge any future surprises?
Insurance can’t be an afterthought – you also need to talk to your insurance advisor early in the process. Start the conversation with your insurance advisor with these questions:
- What is our claims history, and how will it impact a new policy?
- What can we do to avoid future claims?
- Can bumping up our deductible save us money and make us more insurable?
- What gadgets (like leak detectors or burglar alarms) can boost our home’s safety and potentially save money on our policy?
The Shifting Homeowners Insurance Landscape
The entire United States insurance landscape has been gravely affected by premium increases from nearly all carriers, so it is vital to work with an insurance advisor who understands each state-level market and how to minimize your cost when available.
As an example, from May 2022 to May 2023, national home insurance premiums increased an average of 21% at renewal. Some of the most adversely affected states include:
- Florida: 68% ($1,127 to $1,896)
- New Mexico: 47% ($855 to $1,255)
- Colorado: 46% ($1,390 to $2,031)
- Idaho: 46% ($552 to $804)
- Texas: 46% ($1,471 to $2,141)
If you have a residence here, you need to reevaluate your strategy with your advisor.
Keeping your claims history minimal and your deductible high can save you a headache (and money) in the long run. Plus, if you decide to move or upgrade later, having a history of fewer claims is insurance gold.
Not House Shopping? You Still Need to Check In
Even if you aren’t in the market for a home, connect with your insurance advisor to ensure all your insured assets are titled properly (whether they’re owned by you personally or in the name of a trust or LLC).
You also need to make sure none of your assets are uninsured or underinsured, and verify that things like investment properties, watercrafts, aircrafts, etc. are all covered in your umbrella policy.
Finally, you want to make sure that your current carrier is the right provider for your level of assets. Insurance is never a one-size-fits-all solution.
Private Client Carriers such as PURE, Chubb, Berkley One, Cincinnati, AIG, Vault, and more will always confirm your home's rebuild cost, protective devices, and any areas of future concern by conducting on-site inspections. Standard middle markets will not, and this presents a significant danger of underinsurance for the home you have worked so hard to build or buy.
If you have questions about your current or upcoming needs, get in touch with me at Will.Steck@thinkccig.com – I’d love to have a conversation about your personalized coverage strategy.