Rising home prices in the Dallas / Fort Worth area mean larger mortgages in most cases which raises an interesting question, “How much home insurance is needed when you buy a home?” Stated another way, should the amount of home insurance be equal to the purchase price, the loan value, or some other number?
2015 ended with a bang as tornados swept across north Texas damaging or destroying over 1,000 homes and damaging vehicles and commercial properties. Spring of 2016 was not to be outdone either. Last March and April, north Texas was struck by 3 hail storms and San Antonio suffered the worst hail storm in Texas history. The four hail storms combined claims totaled about $1.3 billion in damages to cars, homes, and businesses. Let’s examine how home insurance is being impacted this year.
The spring buying season started early this year. February felt as busy as any April, May, or June, I’ve ever experienced, and it should only grow as we move into the prime spring buying season. I believe it’s a perfect time to look at how home insurance can impact home buyers when purchasing a new home.
I received an email Monday from Kathy O’Brien, a realtor with Dave Perry-Miller’s Intown office. She asked a very interesting question concerning the post I wrote two weeks ago on the impact rising home prices have on home insurance (see https://wiseinsurancegroup.com/impact-rising-home-prices-home-insurance/). The post I wrote approached the topic from a home buyer, however, Kathy’s question was directed from the point of view of a north Texas homeowner. Her question was, “With home values increasing significantly over the past few years, what, if anything, can home owners/consumers do to ensure their property is sufficiently covered?”
Home prices in the Dallas / Fort Worth metroplex have steadily risen since 2010. In December, they were up another 8.5% according to a recent Dallas Morning News article. Over the past 4 years, home prices in north Texas have surged more than 40%, and this impacts home buyers in several ways beyond just paying more for a home. The impact is felt with mortgages and even home insurance.
Buying a foreclosed home is not without risk. You could end up getting an amazing deal on a fabulous home or you could end up buying a money pit. One of the other risks associated with buying a foreclosed home is home insurance. Most people don’t realize, but not every home insurance company will write a policy on a home that’s been foreclosed on. Let’s look at why some companies won’t, some might, and for those where it’s not an issue.
Every insurance company has a set of underwriting questions I answer when writing or quoting a home insurance policy. Some of these will preclude a company from writing a home insurance policy such as the presence of certain dog breeds, foundation or roof types, etc. Others use the answers to these questions to confirm how the policy should be structured.
Christmas dinner has been put away and the used wrapping paper bagged and carried out. Many websites are now posting how and where to celebrate New Year’s Eve, and showing various retrospectives on the year in review. I think this is a great time to look back over the last 12 months, and peek into what’s coming for Texans and their home, car, health, and life insurance.
A client sent me an email asking me to quote a builder’s risk policy for a barndominium she and her husband are planning to build. I haven’t watched HGTV’s Fixer Upper series, so I called her to find out what a barndominium is, as well as to ask her the questions I needed answered to quote a builder’s risk policy for them. After finding several builder’s risk policy options for them, I began researching what companies will write a barndominium insurance policy once the construction is complete.
Sheri and I recently watched a documentary on tiny homes. We enjoyed it and talked about could we live in one, what would it look like, and whether Sheri could build it (she likes power tools). I began thinking about home insurance for tiny homes; which carriers will write a policy for that, what issues may need to be considered, and what underwriters will want to know.
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