Crash. That's the sound of a tree falling on your house. I know, because I woke up to that sound at 2 a.m. today. After last week's cold snap, Anchorage is now being treated to outrageously warm temps ushered in by 60 to 90 mile per hour winds. It's still dark, so I haven't been able to assess the full extent of the damage to the roof. At least I can't see daylight from my office. Yet.
So this seems a good time to talk about homeowners insurance in Alaska. When making an offer on a home, I recommend including a contingency regarding the potential cost of insuring the home. It might read something like this: "Offer is contingent upon buyer's satisfaction with homeowner's insurance quotes, to be obtained within five days of acceptance." Nothing magic about the five days - it could be ten or fifteen or whatever number is acceptable to both buyer and seller, keeping in mind that sellers don't typically like drawn-out contingencies that leave the deal up in the air. I
f you have an inspection contingency built into the contract (and I hope you do), the insurance contingency could be tied to that. Or it may be that the language of the inspection contingency covers insurance disclosure. There's a chance that Alaska's state regulations allowing for Buyer rescission based on new disclosure information could cover insurance disclosure, but state regs don't explicitly deal with how earnest money is treated in the event of rescission. When there's any chance for differing interpretations, it's best to write the contingency into the offer as long as it's structured in so that the seller doesn't see it as a major obstacle.
Why do buyers need to check insurance rates? Because if there have been three or more recent claims on the house, it may be either uninsurable or very costly to insure. I know - it doesn't seem fair. We understand auto insurance rates going up for drivers who have a bunch of accidents or tickets. But was the demise of my neighbor's tree the fault of my house?
No matter. The insurance companies make the rules. Our job is to know what they are and make sure we're not getting into rates we can't afford.
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