The Potential Risks Involved in Purchasing an Older Home

Posted in General, Insurance Tips, Home Insurance, Did you know?

Many home buyers are interested in the charm of older homes, however they may not be aware that if you purchase a home that is more than 30 years old there are risks that could impact home insurance rates.


If you are in the market for a new home and you are drawn to the charm of older homes that are more than 30 years old, you will want to look for homes that have been properly maintained. The Potential Risks Involved in Purchasing an Older Home, Youngs Insurance, OntarioBefore you purchase the home, make sure everything is up to today’s standards, as there are things that can impact your home insurance rates.

Recently, the Financial Services Commission of Ontario (FSCO) published an article titled, “Insurance Coverage Issues Affecting Older Homes,” which outlines the potential issues with purchasing a home that is over 30 years old. In this article, FSCO listed the following items as the things you must look out for and upgrade prior to moving in.

Galvanized steel plumbing

  • Found in homes built before 1950;
  •  life expectancy 40-50 years;
  • they corrode and rust from the inside out;
  • resulting in decreased water flow and pressure;
  • ultimately leading to leaks, ruptures and potential floods.

60-amp electrical service

  • Found in homes built before 1950;
  • threat of overuse and overheating, possibility of electrical fire
  • current standard for new homes is 100 amps
  • some insurance companies may request you update to 100 amps from 60 for coverage;

Knob and tube wiring

  • Found in homes 50 years or older;
  • considered higher risk then contemporary wiring as they;
  • do not have a ground wire;
  • due to age they are vulnerable to damage and exposure;
  • a serious safety risk, as can cause electrical fire;
  • some insurance companies may request you replace with approved wiring material.

Wood burning stoves

  • Risk of serious fire hazard;
  • your insurance company may insist you have it inspected by a ‘certified Wood Energy Technical Training technician.’

Fuel oil tank

  • Any tanks 25 years or older are likely to deteriorate, rust and may leak;
  • leaks are considered environment hazard;
  • and are extremely costly to clean up;
  • most insurance companies will expect all fuel oil tanks to be inspected by the TSSA.
If you are looking to purchase an older home, make certain that you ensure updates are made so that your new home is up to standards and doesn’t negatively impact your home insurance.

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Article Reference

http://www.fsco.gov.on.ca/en/insurance/brochures/Documents/brochures-11.pdf

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