For those who are considering purchasing a home in Massachusetts, one of the many decisions you will have to make is where to obtain your insurance. Many people do not understand the intricacies of homeowners policies simply because they have never had this type of insurance before. In addition to covering your home in the event of a fire, there are other things you should know about homeowners insurance polices.
What Types of Coverage Are Available for Massachusetts Residents?
According to the latest numbers available through the Massachusetts Division of Insurance, for the 2014 year, there were 70 licensed insurance companies that offer coverage to Commonwealth of Massachusetts Homeowners. Unlike many other states, if for any reason a homeowner who has a home valued at $1,000,000 or less cannot obtain coverage, there is a plan called “The FAIR Plan” administered by Massachusetts Property Insurance and Underwriting Association (“MPIUA”), where they may obtain coverage. However, homeowners need to understand what coverage is available. The levels of homeowners insurance in Massachusetts are:
· Coverage A (Dwelling) – this covers the primary residence, plumbing, heating, and air systems from any damage caused by outside forces.
· Coverage B (Other Structures) – coverage for damage to sheds, garages, cottages, or fences that are not connected to the primary residence.
· Coverage C (Personal Property) – when your personal belongings such as electronics, clothing, or even furnishings are damaged, your policy may provide coverage. Keep in mind, damage does not have to occur when the item is on the property. Coverage may be offered to replace an item at actual cash value (deducting depreciation from original value) or may be offered at replacement cost. Replacement cost means the purchase of an item in similar condition to the damaged property.
· Coverage D (Loss of Use) – when your home is inhabitable because it was damaged by fire, flood or other incident, this provides coverage for your living expenses during the time the home is inhabitable.
· Coverage E (Liability Coverage) – someone filing a lawsuit against you or someone in your family for an injury or damage could cause serious financial problems. Fortunately, many homeowners have specific liability coverage for these cases.
· Coverage F (Medical Coverage to Others) – designed to cover minor injuries that occur in your home such as a fall down the stairs that results in a doctors visit but no serious injury or time lost from work.
What Can You Expect to Pay?
According to the Massachusetts Division of Insurance, the average premium for homeowners insurance annually is $1,334. However, for many homeowners, this may leave them under-insured which could result in some homeowner claims being denied. One example of this is a homeowner who has high value art or jewelry in their home. Oftentimes, an insurance company will require a separate rider for these instances and valuations must be provided. Another example is if someone is seriously injured on your property; basic Coverage F will cover minor medical bills, but may not provide sufficient coverage for major accidents. Another potential problem is floods. If your home is in a flood zone, you may be required to carry a separate flood policy. There are also ways to keep your premiums lower. One example of this is for a homeowner who has life and auto insurance with the same provider. The MA Division of Insurance shows that on average, Massachusetts homeowners saved slightly more than $250 dollars per policy by combining policies in 2014.
How Can You Find The Right Policy at The Right Price?
There are many ways to find affordable homeowners insurance. Homeowners should shop around and determine which companies offer the best rates as well as the broadest coverage. In nearly all cases, a homeowner should avoid taking insurance directly from their lenders; these are typically not the most affordable options. Of the currently registered homeowners insurance Massachusetts providers, the Commonwealth of Massachusetts shows the following companies as the “Top 12” providers in Massachusetts:
· Mapfre Insurance Group
· Fair Plan
· Liberty Mutual Group
· Arbella Insurance Group
· Safety Group
· United Service Automobile Association Group
· Safety Group
· Andover Group
· Chubb Inc. Group
· Travelers Group
· Amica Mutual Group
· Vermont Mutual Group
Homeowners should carefully review the policies they are offered and compare them with the rates they are being charged. J.D. Power does an annual rating of insurance companies and they can often provide a new homeowner with information and statistics on how reliable insurance companies are in responding to customer claims.
What’s the Best Deal for You?
There are numerous ways you can find the best deal on homeowners insurance in Massachusetts. Buyers will have to be aware that different areas of the state will pay different rates. You may talk to family, friends, and co-workers and find out what they are paying for their coverage. However, make sure you find out what discounts they may be utilizing, as well as the level of coverage they are getting for their premium dollars. Compare various companies, talk to your auto and life insurance broker and find out if they also offer homeowners coverage. You may be surprised at how much money you can save by shopping around for your Massachusetts homeowners coverage.
Buying a home is exciting and there are numerous decisions that must be made. Since you will be required to carry insurance on your home and you do not want to worry about being uninsured, make sure you provide your insurance broker with the information they need to provide you an accurate quote. This information should include the purchase price of your home, any high-value artwork or jewelry you are keeping in your home as well as a copy of the valuation of your home that includes both your purchase price and potential replacement costs.
2 Point Highlight
Many people do not understand the intricacies of homeowners policies simply because they have never had this type of insurance before.
There are numerous ways you can find the best deal on homeowners insurance in Massachusetts
