Homeowners Insurance In A Hot Real Estate Market

The current hot real estate market has led to a frenzy of bidding wars and accelerating purchasing prices for homes nationwide. What happens after you close on your dream house can determine if it remains your dream house, and getting the right homeowners insurance is key. “People don’t usually start to think about insurance until they actually own something, but you need it from the time your name goes on a contract,” says Carla Parenti, Personal Lines Department Manager.

The right time to look for home insurance 

You should notify your agent as soon as you find a property you think you might like to purchase. When looking for a new home, many people zero in on a particular neighborhood or area. Once you’ve identified the specific area you’d like to live in, the next step should be researching if that area is known to have certain issues. “Some areas of Chicago have problems because of sewer issues or because of improper drainage in the home,” says Parenti. “I suggest you get some information from your realtor if there have been any water issues in the neighborhood or in the homes because that could affect how easy it is for you to get a homeowners insurance policy.” 

Issues that may affect your policy

Parenti recommends finding out if your mortgage company requires any special insurance due to the home’s location. Potential problems may include drain, flooding and storm issues - for example, you may be required to have flood insurance if homes are on a floodplain because some are higher risk than others.  “People don’t think of Illinois having problems with weather-related issues because people normally think of the East Coast or West Coast or Florida, but Illinois over the last three or four years has had quite an increase of losses because of water-related issues, including flooding,” says Parenti. “However, flood insurance could end up costing you three or four thousand dollars if you are now in a high-risk flood zone.” 

Purchasing a home is an exciting but sometimes stressful process, particularly in a hot real estate market. Being on top of your homeowners insurance ensures you have one less thing to worry about and are able to keep that dream home a true dream home.