Not being able to get a home insured can stall, if not kill, a transaction. At this morning’s SILVAR Cupertino/Sunnyvale District tour meeting, an affiliate panel shared information on how to avoid such a dilemma. The panel, moderated by Kyle Chuang (Farmers Insurance), included Walt Rowley (Liberty Mutual Group), Linda Bentson (Old Republic Title), Laura Roseblade and Pauline McDonald (both from State Farm Insurance).

Here are some of many tips the panel shared:
• Each insurance company is different and has its own limitations of coverage, so it’s important to shop around and make sure you are dealing with a true insurance professional who knows the business.

• While there are lenders who may insist that insurance should cover the amount of the loan, insurance companies will only cover the value of the home. The amount an insurance company will cover differs from the appraised value because the appraised value includes land, while home insurance just covers the structure.

• The condition of a house affects insurance coverage more than the age of a house. The following may affect coverage:

– Roof condition – Some companies may deny coverage if an additional layer is placed on top of the original layer.

– Trees and brush in close proximity to the house

– Distance of a fire hydrant or fire station to the house – Some insurance companies will not insure a home if it is more than three miles away from a fire station

– Certain pets

• You have to think in terms of risk. Would you take a risk on a condition that you have observed? Inform you client about a potential problem so it can be fixed right away.

• In the case of condominiums, work closely with the lender. It’s important to know the insurance company that handles the master policy, what the HOA master policy entails, and get a copy of the certification of insurance for the master policy.

• Once you have all insurance documents, get them to your escrow officer as soon a possible.