First Time Homebuyer: Why Insurance and Maintenance Matter

Buying a home is an exciting and fraught endeavour. Getting caught up in a bidding war is easy when you want a home badly. Or maybe you’re casting your net wide and would be happy to secure any house on your list.

A trusted friend or family member who’s also an experienced homeowner can be an invaluable asset. They can help you remain impartial and steer you toward reason, beyond what you see in the glossy listings and immaculate open houses.

It’s important to do your homework. Your dream of being a homeowner could become a nightmare if you aren’t careful. Here are some insurance and maintenance considerations first-time homebuyers often overlook:

Trees 

They beautify the area and increase curb appeal. But they can also be a liability if they’re overgrown, old or diseased. Depending on the health and placement of the tree, your insurance might not cover the damages if it falls and causes an injury or property damage. Most insurance policies only cover up to $1,500 for a single felled tree, with a maximum of $3,000 for all trees per occurrence, regardless of the number felled.

Insect infestations can decimate an entire neighbourhood’s trees. And don’t forget that a neighbour’s trees could become your problem, too. You’re responsible for the cleanup if a tree falls onto your property and there’s no property damage, even if the tree is not yours. Removing a dead or dying tree can easily exceed $1,500; tree trimming runs in the hundreds.

Yard size and grade

Another attractive perk is a lush lawn where you can spend lazy summer days lounging. But the reality of a large property might be a shock for the uninitiated. Lawn maintenance can be time-consuming (or expensive, if you outsource the job). From mowing to planting flowers to removing fallen leaves, yard maintenance is big job.

Lawn care items (push or riding mowers, string trimmers, shears and other tools) can be pricey, so remember to include them in your budget. You might want to hire a lawn care service if you don’t have the time or physical ability. Ask for lawn maintenance estimates in your area.

Yard size and soil type can determine how easy it is to add new plants, outdoor fixtures and improvements. If you’ve got rocky or clay soil, you might have difficulty breaking ground for that gazebo or getting new plants to root. If you’re concerned about a project you have planned, ask an experienced landscaper or builder to take a look. A house sited atop a steep hill may look impressive, but it can lose its appeal after you’ve mowed the lawn or shoveled the walkway a few times.

Check the land grading to ensure the slope is directed away from the house to prevent flooding and water seepage. Also, look for dipped areas that can cause water to pool in the yard. You can correct these issues with a combination of drainage systems, gutters and fill options, but the cost depends on the complexity.

Insects and wild animals 

Home insurance doesn’t cover infestations, nor do most home warranties. Ask a pest control professional to look around your prospective home if you suspect issues. Even if they can’t get inside for a full inspection, they’ll be able to spot telltale signs outside. It might not be a dealbreaker, but at least you’ll know the size of the problem.

If you have wood siding and woodpeckers in the area, they might bore holes into your siding, adding to your annual maintenance and repair costs. Insurance won’t cover these costs.

City and municipal codes

City ordinances are rules that control what you can do on your property, from trash pickup to landscaping to home repairs and rebuilds. For example, if your home is partially damaged in a fire, city inspectors will enforce the area building codes, which may require substantial upgrades to electric or plumbing lines in older homes. Standard home insurance won’t cover a city code upgrade unless you add building ordinance or law coverage to your policy. Familiarize yourself with these governing ordinances before you buy. Most cities maintain their list of ordinances online.

Septic tanks

A septic tank can be a deal-stopper for some insurance companies and banks. The person selling the home may have a certified inspection available, but you might need to get your own. Septic tanks are generally included under “other structures” in insurance policies, but those policies also have many exclusions. Contact your insurance broker early in the process if you’re considering a house on a septic system. You may need sewer backup coverage.

Building materials and labor costs

No matter how much you love a house, try not to get emotionally invested. You can get a good deal on a fixer-upper but be realistic about the time and expense involved in rehabbing. And remember to factor in labor costs and building materials because they can be overwhelming.

A home inspection can save you budget surprises. Ask about the:

• Roof — A new roof can cost well over $10,000, so getting a complete picture of necessary repairs (if any) is worthwhile.
• Fireplace — Get a chimney inspector to review the state of your potential home’s chimney, inside and out. A substance called creosote can build up inside fireplace chimneys. If you don’t properly clean your chimney before using it, this buildup can cause a house fire.
• Siding — Sometimes you can repair rather than replace house siding. Check with the city about any restrictions on paint colors or siding materials. You don’t want to discover that a matching paint color is no longer available, leaving you to repaint the entire house after a minor repair.
• Windows — Windows can be a massive problem if you have many in need of replacement. Check whether your windows can be caulked or sealed before replacing them. And find out if you have to replace the windows with the same type. Casement windows tend to run higher than double-hung windows, so do a quick internet search on the kind you’ll need.
• HVAC system — A busted HVAC system can set you back between $5,000 to $20,000. And if you’ve got old ductwork or steam lines that need replacing, you may need to remove walls or flooring to complete the repairs.

A reputable house inspector is worth the cost, usually only a few hundred dollars. When shopping for an inspector, ask if they:

• Have any limitations on what they will or won’t inspect
• Use cameras to view the inside of air ductwork, gutters and pipes
• Use drones to inspect roofs and other high areas
• Provide you with a detailed written report
• Offer specialized inspections like radon, soil quality, pest control, septic, plumbing and water quality

Call us when you start home shopping

If you’re entering the homebuying arena, congratulations! And give us a call — We can run insurance quotes on the properties you’re serious about before you make an offer.

The bottom line? Be realistic about what you’re getting into, do your homework and protect your investment with maintenance and proper insurance. It’s more than just a place to live; it’s your home and a big piece of your financial future.