How to Save on Home Owners Insurance
I will be purchasing a home soon and want to know how I can save on my home owners insurance policy?
When purchasing a home in Massachusetts and procuring a loan through any mortgage lender, one of the requirements will be to get home owners insurance.
There are no mortgage companies or banks that I know of who will give someone a loan unless their home is insured. This makes perfect sense as the lender is really the owner of the property until the mortgage is paid off and discharged.
When you sign all the loan documents at the closing you will also come to find out that the lender will have the option of taking legal action against you if you do not keep your home insured. The lender is allowed to require you to insure the property for the replacement cost of the dwelling but no more than that.
If you are fortunate enough that you are not getting a mortgage for your home purchase there is no law requiring you to have insurance coverage although it would be down right foolish not too. Considering a home is usually one of the biggest assets you have it makes perfect sense to have home owners insurance. Like Real Estate Title insurance, the moment you don’t have it is when it comes back to bite you!
Massachusetts Home Owners Insurance Savings
Bundle Your Insurance Protection With The Same Company
One of the smartest avenues to save on your home owners insurance premium is to bundle your coverage with other property you may have insured such as a car or boat. Nearly every insurance company is going to give you a discount for insuring both your home and car with them. If they don’t you should be finding a different insurance company!
Since most people have owned a car before a home you should think about trying where you currently get your car insurance protection for a rate quote. Of course there is no guarantee that using your current firm would give you the best rate but it is a good place to start. You should always get multiple quotes so checking with a few insurance companies is a prudent move. You may find that moving your car insurance to be bundled at another insurance company makes more financial sense. While bundling insurance is one method of bringing down your bill, the are other home insurance savings tips.
Do Not Over Insure The Home
Over insuring a home is one of the more common mistakes I see committed by home owners. There are instances when the insurance agent will ask how much insurance coverage is needed to insure the value of the property. Often times people don’t understand that you don’t need to insure the value of the land. There are times people forget this and include it in the insurance amount they request. A knowledgeable Realtor should be able to provide you with a pretty accurate figure to deduct from the insurance equation. Always keep in mind you just want to insure for the replacement cost of the dwelling!
Increase The Deductible
Another way to save some money on your policy is to increase the amount of the deductible. Increasing your deductible amount can often times translate into a pretty serious cost savings. A reduction in the premium of 10-20% would certainly not be unheard of.
What you should be looking at is the probability that you will be needing to make some type of insurance claim. There are certain areas of the country where home insurance claims are far more prevalent. For example Florida is know to have more hurricanes than Massachusetts.
Get A Protective Device Credit
In additions, there are many insurance companies that will provide you discounts for certain features in the home such as a security system, fire alarms, carbon monoxide detectors, special security locks or some other type of “disaster proofing” like storm shutters. Some of these items may be things you want to specifically ask the insurance carrier about when shopping for a rate quote.
Miscellaneous Insurance Credits
Some insurance companies will give you additional credits that could save you money on the cost of your policy including if you are a non-smoker, if the home is newer, if you are a long standing client of the insurance firm or if you and your spouse are retired. All of these items could potentially allow you to receive additional cost savings and are certainly worth asking about.
Saving money on your insurance policy is terrific but keeping your home well maintained is even more important for numerous financial reasons. In fact when you are closing on a property in Massachusetts, often times the closing attorney will give a lecture about what you need to do as a home owner. One of these things is to keep the property insured and not to do anything that would decrease the value. The last thing you want is to have your insurance policy canceled!
In Massachusetts an insurance company is permitted by law to terminate an insurance policy at any time up until the policy has been in effect for 60 days. Once a policy has been in effect for 60 days, under Massachusetts law (M.G.L. c. 175, §99), it can only be canceled during the term of the contract for the following reasons:
- Lack of payment of the insurance premium.
- A conviction of a crime which increases hazard under the policy.
- Committing fraud or misrepresentations by the insured in getting the insurance policy
- Willful or reckless acts or omissions by the insured increasing the hazard of damage
- Creating physical changes in the property making the property uninsured.
- A determination by the commissioner that continuing the policy would violate or place the insurer in violation of the law.
Prior to an insurance company terminating your policy they are required to provide you with sufficient written notice of cancellation, except in the case of nonpayment of a premium when the insurer is to provide at least ten days written notice.
Once an insurance policy is put in place, under Massachusetts law (M.G.L. c. 175, §193P), a home insurance company can decide not to renew coverage at the end of the term of the contract which is typically for a year, provided that at least forty-five days prior to policy expiration, it gives the insured written notice of non renewal with a list of the reasons why the policy will not be continued.
Insurance companies are not going to cancel a policy unless you do something stupid! Follow the law, pay your bills and keep your home in good standing and you will be perfectly fine.
Another form of insurance that I always recommend to every home buyer is Massachusetts Homestead Protection. Homestead protection is one of the cheapest forms of insurance you will ever find so it is well worth getting. What a homestead declaration does is protect a persons home from most creditors.
The Massachusetts declaration of homestead protects the equity in your property for up to $500,000 in the event a lawsuit is brought against you. So if you are sued, $500,000 of your equity could not be touched by an attachment and subsequent levy on execution of sale. See the full article by clicking the link above!
About the author: The above Real Estate information on home insurance savings tips was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 25+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Blackstone, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northboro, Northbridge, Shrewsbury, Southboro, Sutton, Westboro, Whitinsville, Worcester, Upton and Uxbridge MA.