do you really need the extra insurance?

Home Insurance Things You Need To Know When Buying An Older Home

by Rick Mcguinness

If you have just started to search for your new home or you are about to close on your new home, there is one essential aspect you cannot afford to ignore—insuring your new home. And this where home insurance policies come in. However, if you are purchasing an older home, there are several things that you need to know:


The overall insurance of the home will largely depend on the cost of the property and the personal property in the home. In addition, things like the area where the home is located and the natural calamities that are common will also affect the cost of the insurance. Good insurance coverage will cost you more. However, you might need to spend much more money when renovating the home if most of its fixtures are outdated.


The lower your deductible, the more your insurance policy will cost, and vice versa. Deductibles are the out-of-pocket costs you will be required to pay as you file your claim. Therefore, you are advised to make much savings on premiums, or you pay lower deductibles. However, you can weigh in the options and choose which is better for you.

Replacement Cost vs. Cash Value

Replacement cost covers the repairs, possessions, or property replacements to a certain policy limit without subtracting for depreciation. This coverage might cost you more, but it will allow you to recover your losses fully.

Cash value, on the other hand, covers replacement or repairs to a certain payout limit of the policy, minus depreciation. Even though this costs less, the coverage might not cover an entire rebuilt of the home or replacement of personal items in case of a disaster.

All Risk vs. Named Peril

An all-risk peril cover losses caused by a disaster, except if the disaster is specifically excluded from the policy.

A named peril, on the other hand, is a bit cheaper than the all-risk peril policy. However, this policy covers particular disasters specified on the insurance policy. The more types of disasters are included in the policy, the more expensive the policy will be, and vice versa.

If you are particularly prone to a certain type of natural disaster in your area, make sure you are covered. Flood insurance is a common type of insurance that is not covered on your basic home insurance policies, so definitely look into adding that, either by adding to your current policy or purchasing separate insurance.


There are several discounts available. You can consult with your insurance company to inquire more about what they offer. For instance, you can get a discount for buying several home insurance types, like both auto and home insurance coverage.

These five points are just a few insurance things that you need to know when buying an older home. However, you can talk to your insurance company so they can help you learn more about the options available and which ones are better for you.