Your home may be the biggest investment you ever make, so it makes sense to protect it with home insurance. In many cases, homeowners insurance is required under the terms of a mortgage. Regardless, home insurance is also a sound investment that will keep your family afloat if you ever have a fire, theft or other covered loss. At the same time, it can be a major expense. Keep reading to learn how to find affordable home insurance in New York.
Homeowners Insurance Basics: What’s Covered?
Home insurance policies vary, but a standard homeowners insurance policy will cover the following:
- Your home’s structure. This can include the house as well as other structures on your property, such as a garage or shed.
- Your personal belongings. The average family accumulates a substantial value in personal belongings, including furniture, clothes, electronics and more. Coverage may apply to certain losses that occur outside of the home, for example, if your laptop is stolen while you are traveling.
- Personal liability protection. Homeowners insurance typically provides some personal liability protection. This coverage may apply if a guest is injured on your property, for example, or if your dog injures someone.
- Additional living expenses. If your home is uninhabitable, additional living expenses (ALE) coverage can pay for your hotel and other associated fees.
Homeowners Insurance: Named Perils versus All Risk
A homeowners insurance policy can operate on a named-perils or all-risk basis.
- A named-perils home insurance policy lists the types of losses that are covered. Losses that are not listed are not covered.
- An all-risk home insurance policy lists the losses that are excluded from coverage. Losses that are not excluded are covered. Despite the name, all-risk home insurance policies don’t really cover all risks – they just cover all risks that aren’t specifically excluded.
Whether you go with a named-perils or all-risk homeowners insurance policy, some losses will typically be excluded. For example, standard homeowners insurance policies do not cover flood or earthquake damage, but these coverages can be purchased separately. Standard homeowners insurance policies also typically exclude damage caused by wear and tear or the homeowners negligence – the homeowner is responsible for regular maintenance. Other losses may also be excluded, and coverage may vary from policy to policy.
In addition to the exclusions, you also need to pay attention to the limits in your homeowners insurance policy. Insurance companies will only pay claims up to the limit of the policy, so it’s important to make sure your limits are high enough to cover your expenses if you experience a total loss, such as a fire that destroys your home. Many home insurance policies also include a coinsurance clause that can penalize the policyholder for underinsuring a home, even if the claim is lower than the limit. If the value of your home changes, you will need to update your limits occasionally.
Choosing the Right Affordable Home Insurance
The terms HO-2, HO-3, HO-5, etc. are often used to describe different types of homeowners insurance policies. HO-3 home insurance is common, but HO-5 home insurance can provide more robust coverage. HO-2 home insurance, on the other hand, provides less coverage and may not be accepted by mortgage providers. Other types of home insurance fill different needs, such as insurance for renters.
If you’re looking for cheap homeowners insurance, you might be interested in a bare HO-3 policy with only standard homeowners insurance coverage. However, the cheapest homeowners insurance isn’t always the best homeowners insurance. If a loss occurs, you may not have the coverage you need, and that’s not a situation you want to find yourself in.
Build the Homeowners Insurance Coverage You Need
Instead of going with the minimum home insurance possible, consider adding home endorsements that give you exactly what you need.
Popular New York home insurance endorsements and options include the following:
- Replacement cost coverage. Homeowners insurance policies can pay claims based on either the actual cash value or the replacement cost. Because the actual cash value can be less than the replacement cost – due in part to depreciation – this can leave you with less money than you need to recover. Replacement cost coverage addresses this issue.
- Water backup and sewer. Many homeowners insurance policies exclude damage caused by water backup and sewer issues. These losses are fairly common and can be devastating, so consider a policy that includes coverage for these losses.
- Personal injury. Homeowners insurance policies don’t typically provide coverage for personal injury claims, but this coverage can be added through an endorsement.
- Scheduled personal property. Separate limits may apply to home insurance coverage for personal belongings. High-value items, such as jewelry, antiques and fine art, may need to be scheduled separately to make sure you have sufficient coverage.
- Home-based business. Although homeowners insurance provides some coverage for both belongings and liabilities, business losses may be excluded. If you work from home, you may need additional coverage to cover your home-based business.
There are many other endorsements available. Our agents can help you determine which endorsements meet your needs.
Take Advantage of Common Home Insurance Discounts
Getting the best homeowners insurance coverage shouldn’t require paying an arm and a leg. Common home insurance discounts can help you find affordable coverage that still meets your needs.
Homeowners insurance companies often offer the following home insurance discounts:
- Package/bundling discounts for homeowners who also purchase other types of insurance, such as auto insurance and umbrella insurance.
- Loyalty/renewal discounts for long-term homeowners insurance policyholders.
- Claim-free discounts for homeowners insurance policyholders who have not had to file claims.
Navigate Options from Different Homeowners Insurance Companies
Finding the best coverage can be difficult, especially when different insurance companies offer different coverages and rates.
Independent insurance agents contract with multiple insurance carriers, giving you many insurance companies and policy types to choose from. In addition to helping you compare insurance companies, an independent insurance agent can also help you choose the right limits, deductibles and optional coverage types to fit your needs. For help finding affordable home insurance in New York, contact Skeele Insurance Agency.
