I inherited my mom's house. The roof is 32 years old; it's fine — no leaks, no missing shingles etc. but my mom never wanted to spend the money to replace it. No insurance company will write a homeowner's policy because the roof is more than 20 years old. They say I can get insurance as soon as I, or a new owner, has a signed contract for a new roof. But I will be selling the house and my real estate agent, whom I know and trust, says not to replace the roof because any new owner will almost certainly remodel the house in such a way as to need a new roof. Do I have any alternatives for keeping the house insured it's sold? I have a couple of months to figure this out; I have a short grace period from the current insurer.
Homeowner's insurance dilemma
byu/NoahWallaceSchool inInsurance
Posted by NoahWallaceSchool
17 Comments
If you are selling the house, I would absolutely not replace the roof. I would also let the realtor know that you will not be making any major repairs to the house. have them put in the listing that it is the original roof and just let them know that no major repairs will be made. Somebody will still buy the house most likely knowing it’s gonna need a new roof if the house has been repaired or replaced obviously.
If you’re going to sell the house work on doing it ASAP you do not want a house with no homeowners insurance policy on it
List the house for sale as is ASAP and take whatever you can get for it. Don’t screw around trying to get top dollar or finding the perfect buyer. Just get what you can get, close fast, and move on. Avoid financing contingencies like the plague. If you avoid an inspection contingency, even better. You can also pay to get a detailed inspection done and provide that to prospective buyers so they can factor everything in before they submit an offer. The alternative is to spend lots of money – starting with a new roof, and it’s money you mostly won’t get back when you finally do sell.
Sell as is and specify the roof needs to be replaced to be insured. You will need to price accordingly.
> I have a couple of months to figure this out; I have a short grace period from the current insurer.
Assuming you’ve shopped with independent brokers to find alternate carriers and all have said no:
Ask your agent for the price difference in:
1. Selling ASAP, as is, ideally without contingencies, get it closed fast, before grace period expires.
2. Replace roof (call it say, 20K that you won’t get back), but hold out for better offers.
IMO you don’t want to be without insurance so, that’s your options.
FYI if you refuse to put a new roof on, any buyer will be required to buy ins that is high risk and very expensive. This might make your deal harder to do. It really depends on the market you are in, but trying to sell an uninsured house is a terrible terrible idea. Also a house for sale is high risk of lots of damage and I wouldn’t let strangers into my uninsured house.
I say this all from experience and saved about 25% off purchase of my house because most insurance cos wouldn’t insure my house till I redid my roof.
surplus insurance purchased through an agency or brokerage, coverage will exclude the roof, it will be pricey
A broker may be able to find you a policy in the surplus market that excludes any damage caused by the roof’s condition but covers any other damage. Well, whatever perils are covered by the policy. It will be a lot more expensive than standard insurance, but gets some coverage in place until you can sell it.
I have insured homes like this which excludes the roof and damage extending from the roof. Ex: water damage due to a leak. It’s a pricey policy and doesn’t cover much, but at least if it burned down, you’d get something over $0
Not trying to go against sub rules on advertising but to my knowledge allstate does not currently have roof age restrictions in any state that they offer homeowner’s in except for potentially in high risk/coastal areas. Coverage will be dependent on the home passing inspection however so condition will play a part.
You should still be able to get a policy through an independent agent in your area who can shop surplus lines markets or possibly your state’s high risk pool. The coverage is important not only for your home but also the liability if someone gets injured on the property.
The whole roof age thing is stupid. They have a warranty for longer periods than insurance will allow for coverage most time
Surplus or your states fair plan. Roof will be excluded but at least you will get something if the house burns down. Any agent in your state can write Fair Plan ( if there is one in your state) and most can write surplus.
Thank you all for the suggestions. I didn’t know about the surplus or FAIR plans.
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Do you have any estimates on the cost of replacing the roof?
There are surplus line policies that will ACV the roof.
You need to look at a Dp1 at worst and a dp3 at best.
If you’re in the states your state probably has a state Fare plan for uninsurable properties. I’m surprised you can’t actually get a ACV POLICY for the roof