Choosing Excellent Insurance Coverage

Why Insuring An Older House Usually Costs More

Older homes can be more affordable to purchase and are often worth less money than newer homes, but did you realize that the home insurance on older homes is usually more than the cost of insuring new homes? While every situation is different, here are some of the main reasons insuring an older home is usually more expensive than insuring a newer house.

The House May Have a Higher Chance of Electrical Fires 

Homes with older electrical systems are often viewed as higher risks for insurance companies. While old electric systems were effective and safe years ago, today these systems might not be the safest. Newer electrical systems are considered much safer today, and this is primarily because they are designed differently and are made with better types of materials. An electrical fire can be devastating to a homeowner and to the insurance company.

The House May Have Water Damage or a Greater Chance of Experiencing Water Damage

The second reason older homes are costlier to insure involves water damage or potential water damage. Water damage is something that can occur in many ways. In some cases, it is a result of failed plumbing pipes. If a pipe bursts in the winter, it can lead to water damage. If a pipe springs a hole in it in the wall, this too can lead to water damage. Faulty plumbing pipes are more likely to be found in older homes, simply because the pipes are older and have had a lot more use. In addition, older homes often contain pipes made of copper or galvanized steel. Both of these can corrode over time, causing small cracks or holes to form in the pipes.

Water damage can also occur if a basement is not properly waterproofed or if the gutter system is not working as it should be. Leaky roofs can also be a cause of water damage. When a home is brand new, the materials will be new and will be able to protect the house more. This is why there is a lower risk of water damage occurring in newer homes.

Water damage can be very costly, especially if it leads to mold forming in a house, and insurance companies are often responsible for paying the costs to make these repairs. Because of this, an insurance company is likely to charge you a higher rate for your premiums if you have an older home.

There's a Bigger Risk of Foundational Issues

While a home of any age could experience issues with the foundation, it is much more likely that an older home will experience this problem. New houses undergo a number of different inspections as they are being built, and these inspections ensure that the homes are being built properly and with integrity. Older homes may have had good foundations when they were built, but they may currently have issues. There are many things that can cause issues with a home's foundation, including poor water drainage, but it's important to realize that fixing these issues is very costly. This is another reason insurance companies charge higher rates for insurance policies that cover older homes.

You can expect to pay around 20% more for your policy if you have an older home, and it is because of the three reasons listed here. If you feel like you are paying too much for your insurance, you could talk to an insurance agent about discounts. There might be discounts available that you are not currently taking advantage of, and these discounts could lower the costs of your policy. Contact a home insurance company to find out more about the discounts you may be eligible for.