Homeowners Insurance in Massachusetts
What is homeowners insurance?
Owning a house is a major investment, especially so for most Massachusetts residents who likely won’t purchase any one asset that’s more valuable. It’s, thus, important to take care proper care of a home. Proper care includes maintenance, appropriate security measures — and homeowners insurance.
Homeowners insurance provides important coverages for a freestanding house. It may help rebuild the house should something happen, and policies provide other protections too.
Who in Massachusetts should be carrying home insurance?
Most homeowners in Massachusetts need home insurance. Few people could afford to rebuild a residence if it were destroyed, and even major repairs can be major financial burdens.
For the many homeowners who have an outstanding mortgage, insurance isn’t just recommended but is likely required. Lenders commonly require that minimum coverages are in place to protect the outstanding balance on a house’s mortgage. Regardless of any lender requirement, however, coverage is highly recommended for virtually all homeowners in the state.
What coverages can homeowners get through home insurance policies?
Most home insurance policies provide multiple important coverages. Some protections to consider include the following:
- Dwelling Coverage: Generally protects a house against damage caused by covered perils. Covered perils can be listed risks (for a closed perils policy) or all risks outside of listed exceptions (for an open perils policy).
- Other Structures Coverage: Generally protects structures not connected to the main house, and sometimes fences that are connected. Covered structures might include detached garages, guest houses, bridges over creeks, gazebos and similar.
- Personal Property Coverage: Generally protects personal possessions that are kept on a property, such as tableware, electronics, clothes, furniture, sports gear and similar. Coverage may be limited to property at the residence, or extend to most places with “worldwide coverage.”
- Loss of Use Coverage: Generally covers food, loading and certain other expenses if a home is destroyed or otherwise rendered unlivable by a covered peril.
There are still more coverages that policies might offer. There are only some of the main ones that most homeowners look for, and that most policies have as standard features.
What’s dwelling replacement cost coverage?
How much protection dwelling coverage comes with depends on the type of dwelling coverage that a policy has. These should be evaluated in light of the potential cost of rebuilding a house, which can go up over time and spike if a disaster affects much of the state.
Actual cash value coverage normally insures a home for up to the value that it’d sell at. This normally ensures that homeowners can pay off their mortgage and receive their equity, but it might not cover the cost of rebuilding a house.
Replacement cost coverage normally insures a home for up to what it’d likely cost to rebuild. This should make it likely that a destroyed house can be rebuilt to its pre-disaster state.
Guaranteed/extended replacement cost coverage normally adds more coverage onto what replacement cost provides. For instance, guaranteed replacement cost might increase the maximum limit by 25%. This further ensures that a home can likely be rebuilt even if construction costs spike. Not all insurance companies offer guaranteed or extended replacement cost coverage.
An insurance agent who specializes in homeowners policies can help Massachusetts residents evaluate these options and their dwelling coverage needs.
What are the various abbreviations for home insurance policies?
Homeowners policies are often abbreviated by insurance professionals. The standard abbreviation consists of “HO” and a number. Some abbreviations that homeowners might see when checking policy options are:
- HO-1 is usually for named perils policies that provide only very limited protections
- HO-2 is usually for named perils policies that provide a few more protections
- HO-3 is usually for open perils policies that substantially increase protections
- HO-5 is usually for open perils policies that further increase protections
- HO-7 is usually for policies that insure manufactured and mobile homes
- HO-8 is usually for policies that insure historic dwellings and other older homes
How can residents get homeowners insurance?
For help insuring a home located in Massachusetts, contact the independent insurance agents at Pike Insurance. Our agents will work closely with you to determine the best type of homeowners insurance policy, and make sure it has all of the coverages you need.
