Purchasing a home is a huge deal. You have to think about location, proximity to schools, crime rates, mortgage cost, and everything else in-between. Your homeowner’s policy is a core component to protecting this investment. Gathering all the facts is key to coming to a conclusion on any major decision. So let’s debunk myths, de-mystify the situation and get informed.
Yes and No. If you have a mortgage, your lender will require you to purchase homeowners insurance. For the very few who buy their home outright or have their mortgage paid off, homeowners insurance is not required. However, it is highly recommended that you retain your coverage so you are adequately protected should you ever need to file a claim.
Homeowner’s coverage can be divided into the following core components:
No. Flood insurance is a separate policy that fills in the gaps for what is not covered under a standard homeowner’s insurance policy. This means damage caused by natural events, such as hurricanes, torrential downpours, and tornadoes if a flood occurs. Many people believe they do not need to purchase flood insurance if they do not live in a known flood zone. This couldn’t be further from the truth. In fact, floods top the list as the No.1 natural disaster in the United States with 20% of claims coming from moderate to low-risk areas.
It’s recommended, but the decision is ultimately up to you. Umbrella insurance provides additional coverage when maximum limits have been reached. For example, you could purchase a personal umbrella policy worth $1,000,000 that can help cover a $500,000 claim with limits set at $300,000. The first $300,000 would be covered by your homeowner’s policy while the remaining $200,000 would be covered by your personal umbrella policy.
Unfortunately, it does not. When you move from one property to the next, the policy cost can be very different depending on location, the age of the home, and a multitude of other factors. Even if the homes are very similar in size and price, the bottom line can change from one town to the next.
To prepare for a new policy, it’s important to get a home inspection and take note of any safety features installed for a discount when receiving a quote. Your current policy should stay active until it’s sold to safeguard your possessions, protect against disaster, or pay out should a covered loss occur to that property.
Kathy Francioso has been our self-proclaimed home insurance guru since 1982. Today, she acts as our Personal Lines Manager at H&K Insurance. Give her a call at 617-612-6513 to speak with her directly about your insurance needs.