@amthystwlf wrote:
I was calling around about homeowners insurance and it seems a lot of the people I spoke with in my area won't insure older homes unless they have had major updates in the past 20 years. Or they will only insure for fire.
Can anyone recommend companiess that specialize in standard homeowners insurace for older homes? Two possible homes I found right now were built in 1953 & 1940 - both are block homes. I really don't know much else about them except what the MLS lists. I want something that would give me the standard HO2 or HO3 policy. Maybe with the option to cover for cost to rebuild, not just market value.
I am trying to get USDA Direct loan approved.
It is very possible that the homes you are interested in purchasing have had updates to meet insurance requirements. That information would not necessarily be in the MLS info, but it may be in the Sellers Disclosure. You would need to actually get more detailed info about the property before you decide to see it or not. Your Realtor can do that for you by requesting the Seller's Disclosure in advance of you seeing the property and having specific questions answered if those items aren't discussed in the disclosure.
The insurance companies in our area also require 4-point inspections on any home that is 30 years or older. The 4-point inspection determines the condition of the plumbing, heating, cooling and electrical systems of the property. If the property "reveals unacceptable conditions" then the property is uninsurable. In addition to the 4 point inspection, pay attention to the age of the roof. Here the insurance companies won't insure the property if your roof is over 20 years old. They won't even renew your insurance if you have an existing policy and the roof ages beyond 20 years. It may be the same in your area (likely is the same).
Here is a copy of the 4 point inspection memo from Citizens which is our insurer of last resort https://www.nachi.org/forum/f73/citizens-insurance-4pts-30-years-73853/
Here is a good discussion of insurance on older homes - especially regarding roof condition: http://www.insurance.com/home-and-renters-insurance/coverage/have-a-20-year-old-roof-you-may-lose-yo...
If the property is uninsurable, then the only buyers that can purchase it are those buyers that do not need financing: cash buyers. Cash buyers will hit the seller hard with low ball offers on an uninsurable property because they will have to do the work after the purchase.
As you can see this is a seller problem and not a buyer problem. The seller also would have a problem retaining insurance on their own home without making sure the systems are in good condition. It is likely that either the seller has taken care of the issues before putting the home on the market or is well aware that the issues need to be addressed either before closing or in the contract price. The good thing is this - as a buyer you have the option to walk away if the updates aren't done.
