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Homeowners Insurance

A home is one of the biggest investments an individual or family will make. Homeowners insurance, often referred to as HOI, helps to protect from accidents or other incidents that can cause damage to the value of the home itself or the possessions kept inside the home. This may include scenarios such as damage from theft, vandalism, fire, and natural disasters.

What Is Liability Coverage?

In addition to property insurance, homeowners insurance may also provide liability coverage. Liability coverage can offer protection in the event that the homeowner or a family member is responsible for damage to the home. Liability coverage may also provide coverage in the event that a visitor is injured while in the home. In a case like this, homeowners insurance can help to cover the visitor’s medical bills and mitigate the need for legal action.

Natural Disasters

Homeowners insurance should be a special consideration for those who live in areas that are prone to natural disasters, such as earthquakes or floods. While insurance is not legally required for homes, mortgage lenders may impose certain insurance requirements for homeowners who are financing their homes. Homeowners seeking to finance their homes should discuss any potential homeowners insurance requirements with their lending company.

Selecting Your Homeowners Plan

There are several types of homeowners insurance that offer varying levels of protection for policyholders. We can help homeowners conduct a home inventory to determine the value of their property and assets. Based on this home inventory, we can help individuals and families select the optimal type of homeowners insurance to suit their needs, protect their assets, and provide a safety net for possible risks.

Things to Consider When Purchasing Homeowners Insurance

Purchasing a home for the first time can be extremely overwhelming. There are so many new considerations, for example finding the right mortgage lender, interest rates, loan amount, space requirements, inspection and homeowners insurance to list a few.

This article is meant to help first time buyers consider some common items that may have an effect on your homeowners insurance:

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    • Is the home in a flood zone? If so, this could substantially increase insurance costs.

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    • Do you own a dog? If so, some insurance companies may deny you home owner’s insurance coverage or increase your premium due to the breed of the dog or what is referred to as “high-risk” breeds, including but not limited to Pit Bull, Rottweiler, Doberman, German Shepherd, etc.For more information regarding “high-risk” breeds contact your insurance agency.

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    • Do you own a trampoline? If so, this could increase insurance costs.

 

  • Cost of Homeowners Insurance:

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The cost of homeowners insurance is based on the cost to rebuild the residence from the ground up. The market value of the home does not play a role in determining the cost to rebuild.

For example, you could buy a 750 square ft. home on Beacon Hill in Boston and have paid $1 million for it because of the land. However the insurance value might only be $ 150K because it is only 750 square feet or the cost to rebuild (i.e. land doesn’t burn).

Generally the insurance value is estimated using a cost to rebuild figure ranging from $185 to $225 per square ft. to rebuild a “normally” constructed home. However, if the house has several upgrades using high end finishes the cost could go as high as $500 per square foot or higher.

As you can see there are many variables that go into determining the cost of homeowners insurance. The best advice is to contact your agent as early as possible in the home buying process so they can give you an estimate as to what the expected cost may be.