At Congressional Insurance Associates, we try to stay in tuned to changes in the real estate field as our most important partners are the real estate professionals with whom we work. As guidelines are ever-changing with contracts, one of the things that is becoming more and more important is securing home insurance earlier rather than later. With that, here are some facts about insurance that you may or may not know:
1. Some realtor disclosures require the homebuyer to apply for insurance within 7 days of contract ratification. This is critically important because insurance can potentially cause havoc on a deal. There are a few reasons for this:
Home insurance prices could be higher than anticipated due the home being in a high risk flood zone of if the homebuyer has had a claim in the last three years that follows them to their new home (this can effect loan qualifications).
If a new home had a claim, the insurance company may need proof of what happened and what was done to ensure the claim will not repeat itself.
2. These additional issues can cause hiccups in obtaining home insurance:
Having a roof over 20 years old.
Not replacing your central heating system in the last 25 years.
Having a wood burning stove not up to code.
Prior claims on the new home not being completed.
3. CLUE reports are also more critical than ever. This is a “Carfax” for a home that gives you the last five years of claims history. Don't forget that we offer CLUE/FLOOD reports to any homes you are placing offers on or are listing for sale. All we need is the name of the buyer/seller and the address. This is free for our realtor partners and gives you valuable information on the home that you’re listing or putting an offer on.
4. Most people are surprised to know that insurance companies would rather see you file one claim for $100,000 versus three claims that are $1,000 each. This is because studies show frequency leads to severity and administrative costs to file a claim for an insurance company are similar regardless of the claim.
5. If you have a client purchasing a rental property or what we call a “flip” property, special types of insurance are required for these as the risk is increased. Make sure the insurance company knows if the home has a unique living condition so the right type of policy is put together. The best insurance companies will take the lead and ask the client these details to ensure the insurance is done properly the first time.
We have been operating with for our entire insurance careers based on beliefs of getting home insurance done the right way. Obtaining home insurance early is now more important than ever. We also offer an early shopper discount to people who start obtaining insurance early and we can get things done quickly so it's one less thing to worry about. We recommend getting started around inspection time.
Always be looking to work with a locally based insurance company where people are available to have personal conversations with your clients. As local real estate professionals, we are sure you can understand the difference between the value you provide versus a national person that doesn’t know the client. While we would love the opportunity to be that company for you, it’s important to have an insurance professional you trust as one of your service partners.
Feel free to contact us if you ever have any insurance related questions.