Insurance companies have become increasingly reluctant to issue Homeowner Insurance Policies on older homes (usually 25-30 years old or more). The insurance company’s common concern is that there may be conditions in an older home that could become a liability to them and in order to consider a home policy, they may request the Buyer to give them a 4-point inspection is report. The report is usually created by a home inspector. The report covers four areas of the most interest: 1) Heating, ventilation and air conditioning (HVAC), 2) Electrical wiring and its components, 3) Plumbing and its components, and 4) the Roof condition. Any of these four elements could be a potential source of a home owner’s insurance claim. As an example, if a home has a roof nearing the end of its reliable service life and if it fails while under the policy and the homeowner seeks reimbursement from the insurance company for damages to the home or its contents. Similar concerns extend to the condition of the HVAC, electrical and plumbing systems in an older home. If these elements are in poor condition, in need of being updated or replaced or were improperly installed, they may fail and cause fire or water damage to a home. If they are re in good condition, the insurer can feel more confident about issuing a policy. Newer homes are to not have the above problems as frequently as older homes.
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