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November 16th, 2011 12:22 PM by David W. Welch
One of my customers had a lot of questions this week about insuring her real estate purchase here in Orlando. She has heard from other people that it can be difficult and expensive to insure property here in Florida, so I thought I would briefly address some of those concerns. Like any type of insurance, availability and cost is greatly effected by location. Orlando is well inland, and I do not believe we have nearly the issues with availability and cost that our neighbors on the coast have. Of course, since the hurricanes of 2004 it has become a bit more challenging even in the interior sections of the Sunshine State. Overall, most home buyers in Orlando do not have too much difficulty insuring their purchase.
Here some things to be aware of as potential issues regarding property insurance. First, the age of the home can be a factor. Many insurance companies will require what is called a four point inspection before issuing a policy on homes that are more than 25 years old. Speak with your insurance agent about this before having the home inspection, because many inspectors can prepare the four point inspection along with the full property inspection. What is a four point inspection you may be asking. The four points are: roof, plumbing, electrical and HVAC systems of the home. inspection. An older home with an old roof, plumbing, electrical and HVAC may be difficult or more costly to insure. A four point inspection that shows the insurance company that the home's basic systems are updated and in good repair reduces the risk of problems arising with the home, so insurance costs could be much lower.
There are potential issues with each of the four points that can make insurance more difficult to come by. An example of an issue with the HVAC is a poorly maintained system that has become contaminated with mold. Many homes built here in the early to mid 1970's were wired with aluminum. There are insurance companies that would rather not insure these homes. A very popular type of plumbing used in the early 1990's was polybutylene. This grey colored piping was part of a huge class action lawsuit. It is highly unlikely that the faulty piping was used to replumb here, but insurance companies do not usually want to take the risk. Of course, a leaky roof is obviously a potential insurance claim waiting to happen. Thankfully, many have been replaced as a result of the hurricanes a few years back. If the home you are purchasing has a newer roof, an inspection that can help bring down the cost of insurance, is a wind mitigation inspection. Inspectors have to be specially licensed to perform this inspection, and some actually guarantee your insurance savings to at least cover the cost of the inspection. Sometimes the savings are substantially higher.
David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone