Boston area insurance is a virtual necessity for homeowners. Naturally, if you have a mortgage your lender will require you to have homeowner’s insurance coverage to protect their interest in the event of a fire or other peril. For homeowners without a mortgage, insurance coverage is still one of the best investment asset protections available. It will give you peace of mind knowing you’re covered in the event your home is partially or totally damaged as a result of a catastrophe.
Because protecting your home is so important, it’s a good idea to know as much as you can about homeowner’s insurance when you get ready to buy it, add to it, or shop around for the best coverage or lowest rate. Let’s take a look at some helpful tips when shopping for Boston area insurance.
Boston Area Insurance: Ins and Outs
Just the facts, ma’am. Once you find a home you want to buy, assemble as much information about the house as possible. The more facts you know about the property, the better idea you’ll have of determining the cost of the insurance coverage. Insurance costs – or premiums – are affected rather dramatically by the age of the home and its components, specifically the plumbing, electrical, water, sewer, and heating and air-conditioning systems. In addition, the materials used in the construction of the home will have an impact on the insurance premiums. Brick homes, because they withstand fires better, are usually less expensive to insure than wood siding homes. Premiums for homes with less flammable roofing materials will be lower than homes with cedar-shake shingles. For more information on building codes and materials recommendations visit www.disastersafety.org/.
Know your geography. While materials used in the construction of a home is important, where the home is located in the U.S. can influence insurance availability, coverage, and cost. If your home is in areas known for severe weather events or natural disasters such as hurricanes, tornadoes, earthquakes, wildfires, or mudslides you can expect higher costs for insurance coverage. Florida, Louisiana and Texas, for example, are three states which typically pay higher homeowner’s insurance premiums due, in part, to the frequent claims for wind and water damage –– especially along their coastal areas.
The neighborhood in which your home is located may also affect your insurance premiums. A home in relatively close proximity to a fire station will probably cost less to insure than a home in a rural area, secluded from nearby towns and suburbs.
Know when to “say when.” According to recent studies by construction cost estimating experts, over 60% of American homeowners are underinsured. They don’t have enough coverage to replace their homes in the event of a total loss. Insuring a home for its “replacement value” means your coverage would pay for the cost to completely rebuild the home from the foundation up. Keep in mind, there’s a vast difference between “replacement value” and “market value.” One is the cost to rebuild your home in its entirety, the other is what a willing buyer would pay to purchase the home.
The cost of building materials has risen steadily in the past few years. As a result, it will likely cost more to rebuild an older home than its market value. For homeowners that have remodeled their homes, it’s imperative to update your insurance coverage to take into consideration the home’s replacement cost increase. Be careful to insure your home for its entire replacement value, but don’t over-insure it. Paying for unnecessary coverage is wasting money. Know when to “say when.”
Consider floating. Standard homeowner’s policies cover the structure of your home and most of the contents, including some of your personal belongings. Unusually expensive or valuable possessions like jewelry, collectible art, or coin collections may not be completely covered against loss. If you own specific items whose value is higher than the limits of your policy coverage, you can add a “personal articles floater.” While rates vary from state to state – and on the item(s) insured – a personal articles floater may be purchased for under $50 a year.
Full protection, including protecting your assets. A typical Boston area insurance policy covers the repair or replacement of your home in the event of a loss. However, that’s only one part of the homeowner’s insurance coverage. Consider protecting your financial future – and your other financial assets – by carrying personal liability coverage. If a guest in your home suffers a fall on your front steps and is severely injured, his or her insurance company could hold you liable since the accident took place on your property. If you have homeowner’s liability coverage your policy would usually cover the incident up to specified limits.
While standard homeowner’s policies typically offer $100,000 in liability coverage, insurance experts suggest carrying a minimum of $300,000 of coverage. The increased limits may be especially important for homeowners with properties having certain potential safety hazards. Examples would be swimming pools, steep stairs or steps, or walkways that may be slippery when wet or icy.
Be comfortable with your coverage. One good thing about homeowner’s insurance is you can decide what you’re willing to pay out of pocket in the event of a claim. Known as a deductible, it’s the amount of money you elect to pay before your insurance company pays the claim. You can opt for a higher deductible and reduce your premiums.
Be safe and save money. You can probably save money on Boston area insurance premiums by taking safety precautions that may result in discounts by your insurance company. Items like security alarms, deadbolt locks, motion detectors and security cameras can thwart thieves and save you money. In addition, having handy fire extinguishers and smoke detectors in your home will likely save on insurance premiums.
Preventive maintenance. By practicing preventive maintenance and repairing small issues before they become bigger problems, you can avoid potential losses at a later date. Consider home warranty coverages for maintenance needs for appliances, plumbing or electrical systems.
Pay attention to your paperwork. Keep your home records up to date. Have an inventory of your possession and home contents. Many people take photos or videos of their belongings as evidence of ownership. Be sure to keep this and other information in a safe place – away from your home – so it won’t be destroyed if disaster strikes.
Lastly, choose a reputable Boston area insurance company. Check the company’s track record, including the Better Business Bureau’s rating, their customer satisfaction, etc. The department of insurance in your state will likely have a website you can visit to do some research. In addition, industry analyst companies such as J.D. Power & Associates or the A.M. Best Company are good sources of information on insurance providers.
We have a lot more Boston area insurance tips and information in the section of articles to your right under Boston area Real Estate Categories dealing with “Insurance Info”. And we do post tips from time to time on Twitter and Facebook pertaining to Boston area insurance. Check us out there as well.