What Colorado buyers need to understand
A homeowners policy is a package of coverage, deductibles, settlement rules and exclusions. Two homes with the same market value can receive very different insurance terms because rebuilding cost, roof age, claims history, catastrophe exposure, property condition and carrier underwriting all matter.
THE BUYER STANDARD: Confirm three things early: the property can be insured, the policy is acceptable to the buyer, and the coverage can be bound by closing. |
Questions to ask before the insurance deadline
• Has the carrier actually underwritten this address, or is the number only a preliminary estimate?
• What is the annual premium, and is there a separate wind/hail deductible?
• Is the roof settled at replacement cost (RCV) or actual cash value (ACV)?
• What roof age and material does the carrier have on file?
• What reconstruction estimate supports the dwelling limit?
• What extended replacement and ordinance/law coverage is included?
• Are water-backup, service-line or flood coverages needed separately?
• Can the policy be bound by closing, and will the lender accept it?
DO NOT CONFUSE: Market value, assessed value and insurance reconstruction cost measure different things. A home can sell for more or less than the amount needed to rebuild it. |
What Colorado buyers need to understand
A homeowners policy is a package of coverage, deductibles, settlement rules and exclusions. Two homes with the same market value can receive very different insurance terms because rebuilding cost, roof age, claims history, catastrophe exposure, property condition and carrier underwriting all matter.
THE BUYER STANDARD: Confirm three things early: the property can be insured, the policy is acceptable to the buyer, and the coverage can be bound by closing. |
Questions to ask before the insurance deadline
• Has the carrier actually underwritten this address, or is the number only a preliminary estimate?
• What is the annual premium, and is there a separate wind/hail deductible?
• Is the roof settled at replacement cost (RCV) or actual cash value (ACV)?
• What roof age and material does the carrier have on file?
• What reconstruction estimate supports the dwelling limit?
• What extended replacement and ordinance/law coverage is included?
• Are water-backup, service-line or flood coverages needed separately?
• Can the policy be bound by closing, and will the lender accept it?
DO NOT CONFUSE: Market value, assessed value and insurance reconstruction cost measure different things. A home can sell for more or less than the amount needed to rebuild it. |
