Home insurance to homeowners is sometimes seen as just another expense that needs to be dealt with. It’s easy to forget that you’re taking precautions to protect what is likely to be the biggest investment you’ll ever make. Use this as your guide to homeowners insurance, so you can get a policy that works for you.
HOME INSURANCE BASICS
If homeowners have a mortgage, they’re generally required to cover the structure. However, the rest of the policy is largely left up to the homeowner. Unfortunately, most homeowners don’t have the protection they need if their home and property suffered a natural disaster or criminal encounter. It’s the homeowner’s responsibility to consider their priorities before determining how much coverage they need. Home insurance can also cover legal fees or liability claims against the owner.
STRUCTURAL PROPERTY
Policies can cover all structures along the home, such as a new fence, renovated tool shed, or retrofitted plumbing. An insurance agent will typically help homeowners decide what their coverage should be in these cases, keeping in mind the replacement costs vs. the market value. The market value is determined based on real estate demand, which does not always represent then replacement costs for Massachusetts property. (For example, if the market value is $250,000, but it costs $350,000 to rebuild the home.) Any other structures will generally be considered a percentage of the total coverage limits. Your guide to homeowners insurance starts with understanding how you’ll replace the pivotal components of the property.
PERSONAL PROPERTY
When it comes to protecting personal property, most people have accumulated more wealth than they think. Some people may think that just because their furniture or appliances are older, they don’t have very much wealth to protect. However, the financial impact of a loss can be far larger than a homeowner could have imagined. From jewelry to expensive electronics to designer clothes, homeowners have more to lose than they realize. If the homeowner makes any significant purchases for the property during the time of ownership (e.g., expensive art, a new tool shed, etc.), policies can be updated to include the new property.
LOSS OF USE
From water damage to vandalism to fire, some events are so damaging that homeowners risk their physical safety by staying inside. Depending on the weather, contractors, and level of destruction, it can take months to make a residence inhabitable again. While many people have family or friends they can live with, others may have no other alternative but to stay in a temporary rental or a hotel. Homeowners should have a plan in mind of where they will stay before they decide whether or not to forego the loss-of-use clause in their policy. Owners should also keep in mind that it’s not often feasible to ask relatives or friends to stay in their home for extended periods.
LEGAL RESPONSIBILITIES
Massachusetts homeowners have a number of responsibilities when it comes to protecting their land and the people who are on it. It’s up to the inhabitants to ensure that their home provides safety for those who visit or use the land for any reason. If the mail carrier should trip and fall on an untreated walkway during winter, homeowners may be responsible for the person’s injuries. They may even be responsible for their wages if they’re unable to work. If a homeowner is sued or needs a way to cover medical bills, homeowners insurance will be able to cover some or all of the costs.
ADDITIONAL CONSIDERATIONS
Homeowners should be aware of the things that standard home insurance doesn’t cover. For example, flooding insurance is sold as a separate policy, and it’s an event Massachusetts residents should prepare for. These policies are generally written by The National Flood Insurance Program, a government-sponsored organization that helps make flooding insurance easier for homeowners to afford. Another potentially catastrophic event that homeowners may want to prepare for is the possibility of mold or sewage backup. Mold is particularly difficult and expensive to remove, but both can severely threaten residents respiratory and overall physical health.
Your guide to homeowners insurance starts and ends by talking to a professional who understands Massachusetts home insurance. Because your policy is customizable, they can walk you through your options and help you choose the right one!