Amenities That Can End Up Costing Home Owners

Amenities That Can End Up Costing Home Owners

Expensive Home AmenitiesIn the search for a new home, there are a few essential requirements that buyers look for such as the bedrooms, bathrooms and kitchen. Despite the necessity of these features, they may not always be a large part of the deciding factor of a home. Then there are a few non-essential amenities such as a swimming pool, waterfront access and a vast amount of square footage that can really draw a buyer into a home and end up being the ultimate influencer in the purchase of a home.

As wonderful and fun as they can be, these features can end up costing the home owner a lot more in insurance premiums than they are worth. Unfortunately, most buyers don’t realize the full cost until after going into contract, which is when home buyers typically get insurance quotes on a property. In order to avoid a serious sticker shock, here are a few specs on home features that could bump up insurance costs a great deal:

Swimming Pools

Despite their fun and relaxing nature, swimming pools are considered one of the biggest home liabilities by insurance companies. Home owners typically insure their homes with a minimum liability coverage limit of $100,000. However, due to the high rate of drowning and water injuries, financial parties such as the Insurance Information Institute recommend increasing that limit to $300,00, which will significantly raise the premium. Some even recommend investing in an umbrella policy to increase liability coverage in the event that a friend or neighbor has an accident in the pool.

Water Views

A beautiful water view can have a wonderful calming effect on a home owner, but this does not come for free. Properties located on an ocean, lake, river or other type of body of water are valued substantially higher than inland property and they also carry a greater risk of flooding. As a result of this risk, waterfront properties require more extensive insurance coverage.

Many standard home owners and renters insurance policies cover water damage, but they don’t cover damage from flood/rising water. In situations where rising water is a threat, an additional flood policy is typically required as a protective measure. In cases where a mortgage is involved in financing the purchase of a waterfront home, the lending company will likely require a flood insurance policy for the home.

Square Footage

Trying to tell someone moving out of a cramped city apartment that bigger is not always better may not go over well, but it will when the cost to insure a large home is factored in. When a home has more square footage, it costs more to replace in the event of catastrophic damage. This will up the cost of dwelling coverage, which is a portion of a home owners policy that provides for structural rebuilding of a home. Home owners can get an idea of how much this might cost by multiplying the total square footage of the property by local construction costs.