Why A New Home May Attract High Insurance Rates
Most homeowners know that old homes are expensive to insure because they have outdated and dangerous installations, such as old oil tanks and unstable electrical wiring. However, don't assume that a home will attract low insurance rates just because it is new. Here are three reasons a new house might be expensive to insure:
It's Located in a Disaster-Prone Area
Some places experience disasters so often that it automatically impacts homeowners' insurance rates. Examples include a property in a flood-prone area, a beach house in a hurricane-prone area, a property on a fault line that triggers frequent earthquakes, and a home in a neighborhood that experiences frequent wildfires. All of these properties will be expensive to insure, even if they are relatively new.
Homes That Are Vacant Most of the Time
Vacant homes attract many risks, even when they are new. For example, burglars and vandals often target vacant homes because they are not likely to be caught. In addition, small disasters can grow into big ones and destroy a vacant home because nobody will be around to deal with the problem. For example, if a water pipe bursts when you are around, you can easily deal with it before it turns into a major disaster. However, you will be out of luck if the same thing happens in your vacant vacation house, and a single burst pipe can cause serious damage.
Homes with Multiple Attractive Nuisances
An "attractive nuisance" is something that kids find irresistibly attractive, but it can also cause serious injury to them. If a kid enters your home, even without your permission, and gets injured by an attractive nuisance, you become liable for the injuries if you didn't take adequate precautions to prevent such a happening. Since it's your home insurance company that will pick up the tab if you are sued, it must raise its rates if you have attractive nuisances in your home. Therefore, be ready to pay premium rates if you buy a home with a trampoline, swimming pool, abandoned well, or other attractive nuisances.
Many people shy away from owning old homes because they think (and in most cases, they are right) that these old homes will attract high insurance rates. However, the above discussions clearly show that home insurance rates involve much more than the age of a home. Therefore, even if you have a new home, you need to take the necessary precautions to keep your rates manageable.
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