When you purchase a home, the mortgage company will usually require you to purchase homeowners insurance. However, even if it is not required, homeowners insurance offers so many protections and benefits that it is in your best interest to get it anyway. Homeowners insurance will protect you against many of the risks that come with owning a home – often one’s largest asset.
The Three Reasons
While there are many reasons to get homeowners insurance, today we are just going to focus on the three most important. When you contact your local insurance agency such as our agency in New Bedford, make sure to ask what is covered, how much coverage you have with each type of policy and find out if there is any extra coverage you should have as a Massachusetts homeowner. For example, your local agent will be able to help determine how much you should insure your home using building and labor costs specific for the greater New Bedford area.
#1 – Natural Disasters
When most people think about homeowners insurance, this is that they think of. The coverage that comes with most policies will cover things such as fires, storms or almost anything having to do with Mother Nature. Even if you do not live in an earthquake zone in California or in the path of the hurricane in Florida, it is worth learning if you are covered in the event of a natural disaster – you need to be prepared for anything.
#2 – Vandalism/Theft
Many homeowners believe that if they live in a “good” neighborhood, they won’t have to worry about vandalism of their home or theft of their personal belongings. Unfortunately, this type of crime knows no boundaries and in fact, affluent neighborhoods in the greater New Bedford area generally become targets of crime simply because of the perceived value of the items that would be found in such a home. Homeowners insurance can cover your home, your possessions and anything else of value so you can recover any items that were stolen or damaged. However, the higher the value you have in a specific class of property- such as jewelry, needs to be addressed with your agent to be sure you have the proper insurance protection.
#3 – Personal Liability
There are a number of reasons to protect yourself and your home from personal injury claims. Here are some examples: Your mail carrier slips on snow and ice and is hurt. You have a dog and it bites one of your neighbors. You hurt someone during some sport or riding your bike. You have a dead or rotting tree on your property that falls on your neighbors car, after that neighbor has warned you to remove it. The list goes on and on – this is definitely a case where it’s better to be safe than sorry. Most homeowners insurance policies cover personal liability – make sure to ask your agent if this is included in your policy and if you have a reasonable limit.
Around the Nation People Often Refer To ” The Three Policies”
In addition to three primary reasons why you should get homeowners insurance, there are three primary types of homeowners insurance policies that are generally available. These policies are the HO-1, the HO-2 and the HO-3. The HO-3 offers the most for causes of loss to your house. To consider the lesser HO-1 and HO-2 in order to save a little money, makes little sense.
HO-3 – The Open Policy
This is the most common type of policy sold and it covers any type of accidental event or sudden occurrence that is not specifically listed and excluded in the policy. The burden of proof is therefore on the insurance company to decline a claim by referencing the policy language. Things like wear and tear are not covered under any policy even the HO-3 policy, but a sudden collapse of a roof that was otherwise in good condition would. There are countless unforeseen events that could occur that are itherwise covered under the HO-3.
There are different editions of the standard HO-3 policy that are published and released by the Isurance Services Office (ISO). New editions are periodically released and have a few changes within it. Ask your insurance agent about these changes when a new edition is adopted by your insurance company. Be cautious of any insurance company that has developed their own policy with nonstandard, non-ISO language.
When determining the best insurance protection for you, you need to speak with an insurance professional who will help you decide how much coverage and the limits to have. In the event of a total or partial loss to your house, you need to determine ahead of time if you want to replace or repair your house exactly as it was or if you want to accept an actual cash value settlement. By choosing an actual cash value settlement you accept paying some out-of-pocket expense to repair or replace your house. The type of value payout you have will greatly affect your settlement when you file a claim. This is why you need to discuss your policy with a local insurance professional.
The time to find out if you have the proper type and amount of insurance isn’t when disaster strikes. As a Massachusetts homeowner you have a responsibility to your home and your family to ensure that you are properly insured right now before you need to make any type of claim. Remember to ask a lot of questions, do a little research ahead of time and your New Bedford insurance agent will help you to make an informed choice.