Insurance Tips for Homebuyers

Perhaps you're thinking about buying a home in that older, more established neighbourhood you love. Know that if you're going to have a mortgage on your home, you are going to require home insurance. And also know that insurance companies require that certain upgrades be made on older homes before they will offer coverage.

Here are some tips to keep in mind if you are considering purchasing a home that is over 30 years old. If the following areas of the home that you are thinking about purchasing have not been upgraded, you may want to factor the cost of these upgrades into any purchase offer you may make on the property.

60-amp electrical service: most insurance companies will require that you have a minimum of 100-amp electrical service in the home to ensure that there will be no danger of overuse causing a fire.

Galvanized steel plumbing: most insurance companies will require that this plumbing be replaced with copper or plastic. Galvanized steel plumbing will begin to rust or corrode from the inside out after about 40 years. This may cause leaks and potential flood damage to the home.

Wood-burning stoves: check that the wood stove has been installed properly and has been inspected by a Wood Energy Technical Training (WETT) technician. Many wood stoves are not installed correctly and may present a fire hazard.

Heating oil tanks: check the age of the oil tank; if it is over 25 years old, the insurance company may ask that it be replaced, as there could be leakage. This could pose an environmental hazard if the oil leaks into the ground.

Knob and tube wiring: most insurance companies will require that this type of wiring be removed and replaced with copper. Knob and tube wiring is considered a hazard for a number of reasons (no ground wire, overuse, etc.).

Check with your insurance professional for the specific rules for your insurance company before buying the home. You should also consider the total cost of ownership before making any offers - that includes the cost of home insurance. To get quotes and compare rates on home insurance, visit

For more home insurance information, check out other home insurance articles.