"Are we making a mistake buying now?" is one of the most common questions Tennessee buyers ask. Rates, prices, and timing get all the attention. But some of the most expensive mistakes we see at All Seasons Insurance Group have nothing to do with the market. They're insurance mistakes made in the 30 days before closing, and they can cost buyers thousands or leave a brand-new home underinsured. Here are the ones to avoid.
Mistake #1: Shopping for Insurance the Week of Closing
Many buyers wait until the lender asks for a "binder" (proof of coverage) days before closing. By then, the inspection period is over. If the home turns out to be expensive or hard to insure, whether from an old roof, a past water claim, or a high-risk location, you've lost your leverage to renegotiate or walk away.
Do this instead: Get a quote on the specific address as soon as you're under contract, while your inspection and due-diligence contingencies are still open in your Tennessee purchase agreement.
Mistake #2: Ignoring the Age of the Roof
In Tennessee, where hail and wind are a fact of life, roof age is one of the biggest factors in what you pay and what's covered. Roofs older than about 15 to 20 years can mean:
- Much higher premiums, or some carriers declining to write the policy at all
- Actual cash value (depreciated) roof coverage instead of full replacement cost
- A requirement to replace the roof within a set time after closing
Ask the seller for the roof age and any permits or receipts. If the inspector flags the roof, factor that into your offer negotiations.
Mistake #3: Insuring for the Purchase Price Instead of Replacement Cost
Your purchase price includes the land. Your dwelling coverage should reflect what it would cost to rebuild the house at today's construction costs, which can be higher or lower than what you paid. Insure too low and you could come up short after a total loss. Insure too high and you're paying for coverage you can't use. A good agent runs a replacement cost estimate using square footage, construction type, and finishes.
Mistake #4: Not Asking About the Home's Claims History
Insurers pull a CLUE report that shows up to seven years of claims on the property, not just on you. A house with past water or foundation claims can cost more to insure, even though you had nothing to do with them. Ask the seller (through your agent) for a CLUE report, or ask us to help you understand what past claims mean for pricing.
Mistake #5: Assuming Flood Is Covered
Standard homeowners policies do not cover flood. Period. Tennessee has seen devastating flooding in both Middle and East Tennessee, and a large share of flood claims come from homes outside FEMA high-risk zones, where lenders don't require coverage. Check the flood zone, look at the lot's grade and drainage, and get a flood quote. Preferred-risk flood policies are often affordable. Also remember that most new flood policies have a 30-day waiting period.
Mistake #6: Picking the Lowest Deductible Without Doing the Math
A $500 deductible can raise your premium a lot compared with $1,000 or $2,500. And many Tennessee policies now include a separate wind/hail deductible, often 1% to 2% of your dwelling coverage. On a $350,000 home, a 2% wind/hail deductible is $7,000 out of pocket after a storm. Know both numbers, and keep cash set aside to cover them.
Mistake #7: Forgetting Insurance Is Part of Your Monthly Payment
Your lender will usually escrow your homeowners premium into your monthly mortgage payment. With Tennessee premiums commonly running $2,500 to $3,500+ a year, insurance can add $200 to $300 or more to your monthly payment. Buyers who get pre-approved using a generic insurance estimate can find their real payment is higher once the actual quote comes in. Ask your lender to use a real quote.
Our partners at AnnieMac Home Mortgage can build your payment around actual insurance and tax numbers. Call (865) 518-6408.
Mistake #8: Overlooking Special Property Features
Standard policies may limit or exclude coverage for:
- Pools and trampolines: extra liability exposure, and sometimes surcharges
- Wood stoves: some carriers require an inspection
- Short-term rental use: a regular homeowners policy often won't cover Airbnb or VRBO guests. Smoky Mountain cabin buyers need a policy built for STRs.
- Detached structures, ADUs, and barns: check that "other structures" limits are high enough
- Home businesses: business equipment and client visits usually need an endorsement
- Sewer and water backup: usually excluded unless you add it, and it's a cheap, important add-on
Mistake #9: Letting Coverage Gaps Happen
If you're selling one home and buying another, don't cancel your old policy the day you close on the new one if the old house still belongs to you. Vacant homes often have restricted coverage after 30 to 60 days. If you're renting before you buy, keep your renters policy active until your homeowners policy begins on closing day. Timing matters.
Mistake #10: Not Bundling or Re-Shopping
Bundling home and auto is one of the biggest discounts available. Other discounts can come from newer roofs, monitored security systems, water leak sensors, and good credit. Work with an independent agency that can compare multiple carriers, and re-shop your policy every year or two, because Tennessee rates have been changing quickly.
So, Is Buying Now a Mistake?
That depends on your finances, your timeline, and the home. We can't decide that for you. What we can do is make sure insurance isn't the thing that turns a good purchase into a bad one. Getting coverage lined up early gives you real numbers, negotiating leverage, and peace of mind on closing day.
Your Tennessee Home-Buying Team
- Homeowners, flood, and auto quotes: All Seasons Insurance Group, (865) 263-1400, asigtn.com
- Mortgage pre-approval: AnnieMac Home Mortgage, (865) 518-6408
- Buying or selling a home: the Kings of Real Estate team at kingsofrealestate.com
Under contract, or about to be? Call us today and we'll quote the property before your inspection period ends.
