Quote the Insurance Before You Remove a Claremont Contingency

Most buyers treat insurance as the last errand before closing. Somebody asks for a policy, you call an agent, a number arrives, escrow closes.

That order works right up until it does not, and when it fails it fails late, when your contingencies are gone and your options have narrowed to accepting whatever is available. The fix is simple and free: quote the SPECIFIC ADDRESS at the start of escrow, not the end.

Why insurability is a due diligence item

Your lender will require coverage. That means the availability and cost of a policy is not a preference, it is a condition of your purchase completing.

Availability and terms are not uniform. They depend on the property and its history rather than on the neighborhood in general, and they can differ between carriers for the same house on the same day. So a friend's premium on another street tells you nothing about the house you are buying.

Cost matters too. Insurance is part of what you pay every month, and a materially different figure from the one you assumed changes your own view of what the property costs to own.

What carriers ask about

Expect questions in these areas. Each is a reason the answer can differ from the one you expected.

ROOF. Type, age and condition. This is one of the most common reasons a quote is declined, restricted or priced differently.

ELECTRICAL. Panel type and wiring method. Certain older systems attract questions.

PLUMBING. Supply material and its age.

HEATING SYSTEM AND WATER HEATER. Type, age and installation.

CLAIMS HISTORY. Carriers look at loss history associated with the property as well as with you. A prior claim is not a disqualification, but it is information.

OCCUPANCY AND USE. Owner-occupied, second home, or rented. A property with a rental unit is a different product from a single-family home, and the answer must be truthful.

OTHER FEATURES. Pools, trampolines, certain dog breeds, outbuildings, solar equipment and short-term rental use all come up.

WILDFIRE AND OTHER HAZARD EXPOSURE. Location-based factors are assessed by carriers using their own models, which is why the natural hazard report and an insurance decision are two different things.

The natural hazard report is not an answer

Your disclosure packet includes a third-party natural hazard report showing whether the parcel sits inside various mapped zones. It is useful and it is not a substitute for a quote.

Carriers make their own assessments, and a property can be outside a mapped zone and still be evaluated differently than you expect, or inside one and insurable on ordinary terms. Read the report, then get an actual quote on the actual address. How the rest of that packet should be read is in what a Claremont seller's disclosure packet is really telling you.

What to do, and when

Day one of escrow, give an insurance professional the address and ask for a quote. Not an estimate, a quote against the real property.

Give them the true facts. Roof age, panel type, plumbing, pool, any rental use, any planned work. A quote produced from optimistic answers is not a quote, and a policy issued on inaccurate information is a problem you have bought rather than solved.

Ask more than one source. Availability and pricing differ, and the second call sometimes changes the picture entirely.

Ask what would change the answer. Frequently a carrier will say that a specific item, such as a roof or a panel, is what is driving the outcome. That converts a vague problem into a negotiable one, because now you know what to ask the seller about or what to price in.

Ask about deductibles and about which perils are and are not covered, including any separate coverage you might want. Earthquake coverage in particular is a separate decision with its own considerations, set out in the earthquake insurance guide for Claremont homes.

Coordinate it with your inspection

The two investigations feed each other. Your inspector tells you the roof is at the end of its service life; your insurer tells you that is why the quote came back the way it did. Together they turn into a specific, evidence-backed conversation with the seller rather than a general complaint.

So schedule them in the same week, and give your insurance professional the inspection findings if they change any answer you originally gave. How to act on the report itself is covered in Claremont home inspections and how to respond.

If the answer is bad

You have options while your contingencies are in place, and very few afterwards. That is the entire point of doing this early.

Shop harder, because carriers differ. Ask what remediation would change the outcome, and price it. Ask the seller to address the driving item or to credit it. Reconsider the purchase if coverage is genuinely unavailable or the cost changes what the property means to you.

All four of those are real choices at the start of escrow. At the end, with contingencies removed, most of them are gone.

The rule

Quote the address in week one. Answer the questions honestly. Ask what is driving the outcome. Keep your contingency until you have a written answer you can live with.

It is one phone call, made early instead of late. More buyer guidance is in the buying a home hub.

Anthony Grynchal has been licensed in California since November 2009.