Buying a home is an exciting journey that also has plenty of obstacles to overcome. In addition to qualifying for a mortgage, you must also start shopping around for homeowners’ insurance. If you’re in New York City or surrounding metropolitan area then you have unique challenges that homebuyers in other markets do not face given the apartment aspect. You also have interesting ways to save money on your New York homeowners’ insurance that get overlooked.
Why Do You Need Homeowners’ Insurance?
While not generally required by law like auto insurance, it’s a good idea to have homeowners’ insurance even if you buy an apartment and don’t need to worry about structural replacement as much as a homebuyer seeking a traditional single-family home does. Regardless of what type of home you live in, accidents like falling trees can still happen. If your upstairs neighbor who’s fond of waterbeds springs a leak that results in black mold in your apartment, mold abatement services can eclipse your down payment. Homeowners’ insurance not only protects you from having to cover all of these colossal expenses yourself, but most policies will also pay your living expenses while your home is being repaired.
If you are purchasing a co-op and not a condo, the co-op board may require you to have homeowners’ insurance lined up prior to moving in. For both co-ops and condos, their master insurance policies usually only cover the grounds and building common areas while you are responsible for insuring what’s within your own four walls. Even if the board doesn’t require insurance to buy in, it’s prudent to do so in case of unforeseen property damage.
If your home is a detached structure and it gets completely blown off its foundation, you’ll want your homeowners’ insurance to be able to replace it all the way down to your backsplash tiles and Food Network worthy kitchen upgrades. Make sure that your policy has you covered for not just the purchase price of your home but also the value of upgrades. If you’ve made a significant upgrade to your home since you initially purchased insurance, you should speak to your agent about adjusting your policy. Pay attention to market trends in your immediate area as you’ll want a sufficient replacement rider in the event your home would need to be completely rebuilt.
What Does a Homeowners’ Insurance Policy Cover?
Then there are three basic components to a homeowners’ insurance policy: dwelling, personal property, and liability. When it comes to dwelling coverage, it accounts for the exterior and foundation. Dwelling coverage is more important for homebuyers with detached structures than those with apartments as a separate organization owns the building and common areas, but 20% “studs in” coverage is common for New York apartments. This would insure you from structural damage and accidents that your co-op or condo’s master policy doesn’t reimburse you for.
Personal property coverage covers the loss of appliances as well as furniture, clothing, electronics, and other items that can get damaged in the event of a fire, natural disaster, or other unforeseen event. When calculating personal property coverage, agents usually refer to a table based on the size of your home and household composition.
Liability coverage entails being reimbursed if someone gets hurt in your home and they want you to pay for their medical bills or damage to their property.
How Can You Save Money Through Your Deductible?
The higher the premium you pay the lower the deductible, but the premium is still determined by how much coverage you want so simply having fewer things to cover is one way to save. If you live in an area prone to accidents, you’ll want to pay a higher premium for a low deductible to save money. If you’re in an outer boro that’s a higher elevation than lower Manhattan and don’t anticipate significant damage in another superstorm, you’ll save more money by going for a higher deductible and lower premium.
How Else Can You Save on Homeowners’Â Insurance?
Aside from saving on dwelling coverage by having an apartment, many insurers offer discounts for the varying levels of security that apartment living offers. For single-family homeowners, there’s usually a basic discount for having a security system. If your co-op or condo has roving security and/or security cameras planted in the lobby and on each floor, you can save up to 20% on your personal property component. If your building has a doorman, you can potentially save even more.
If you work at home, you may also be able to save money on your policy depending on your insurer. Retirees and work at home types are more likely to be at home to prevent thefts as well as help mitigate damage from accidents.
If you drive and are happy with your auto insurance, your insurer may give you a bundling discount if you like their homeowners’ policies and decide to go with them. Your insurer may also give you a discount for having a good credit rating.
How Do You Find a Good Agent Who Will Help You Save Money?
Start with asking family, friends, community members, and other people you trust. If none of them are homeowners and can’t help you, try searching for agent through the National Association of Insurance Commissioners. Your real estate broker or mortgage banker may also be able to refer you to an agent to start with, but they could wind up not being the most economical option.
Shop around by checking out NAIC, your broker’s recommendations, and submitting requests through insurer websites. One insurer may offer a work at home discount while another doesn’t, some may have inflexible personal property riders so be sure to shop around by the conditions of the coverage and not just the premium itself.
2 Point Highlight
“You also have interesting ways to save money on your New York homeowners’ insurance that get overlooked.”
“Aside from saving on dwelling coverage by having an apartment, many insurers offer discounts for the varying levels of security that apartment living offers.”
