Guide to Buying Homeowner's Insurance

  1. What are the insurance requirements when purchasing a new home?
  2. What is the advantage of using an independent insurance agency like John J. Prudente?
  3. What type of coverage does the homeowners policy provide?
  4. How much does a homeowners policy cost?
  5. What kind of credits are available to lower my premium?
  6. Is my home office covered under my Homeowner's Insurance policy?
  7. Is flooding covered under my Homeowner's Insurance policy?
  8. Is earthquake damage covered under my Homeowner's Insurance policy?

What are the insurance requirements when purchasing a new home?

When you receive a loan commitment from your bank or mortgage company, the language usually goes something like this: "You are required, at the time of closing, to provide evidence of hazard insurance with a dwelling limit at least equal to the loan amount, unless the policy includes a guaranteed replacement cost provision."

Hazard insurance simply means a homeowners policy. Whether we can provide you with guaranteed replacement cost depends on the year the house was built and whether the systems (electricity/wiring, heating, plumbing) and roof have been updated.

We will provide you with a binder (temporary evidence of insurance until the policy is issued) for the closing.

Also, the mortgagee usually requires a paid receipt: evidence that the first year's premium has been paid-in-full. The mortgagee may then escrow (i.e. include 1/12 premium in your monthly loan payment) - so that by the time your policy renews in one year the money will be available for disbursement to the insurance company.

John J Prudente Agency will also forward copies of the binder and paid receipt to your closing attorney.



What is the advantage of using an independent insurance agency like the John J. Prudente Agency?

We can analyze your specific needs and provide you with a proposal from one of our quality companies:



What type of coverage does the homeowners policy provide?

A basic homeowners policy provides 'all-risk' coverage on the Dwelling (excluding flood & earthquake) and based on that limit, includes: 10% coverage for an 'Other Structure' (like a garage), 50-70% coverage for your Personal Property (note that there are special limits on certain classes of property like jewelry, furs, & silverware), and 20% Loss of Use (the extra expense incurred should you have to temporarily relocate due to a covered loss). In addition, the policy provides Personal Liability ($100,000-$1,000,000 Limit).



How much does a homeowners policy cost?

The cost of a homeowners policy varies by location, amount of insurance, any special provisions (such as guaranteed replacement on the dwelling and/or contents), the size of the deductible, and the insurance company. We strive to provide you with the appropriate coverage, through a financially sound company, at a competitive premium.



What kind of credits are available to lower my premium?

  1. Higher Deductibles
  2. Alarm systems (smoke detectors, burglar and/or fire alarm systems - local or central station)
  3. Dead Bolts, Fire Extinguishers
  4. Non-Smokers
  5. New Homes
  6. Account Credit (having your auto insurance with the same company)



Is my home office covered under my Homeowner's Insurance policy?  

Do you have a home office? If so you need to call us so we can add the proper endorsement to your homeowners policy. The current home policy limits personal property used at any time or in any manner for business purposes while on your premises to $2,500 and off premises to a maximum of $250. Not much coverage. For a small cost we can probably cover your business "stuff". Don't delay call your agent to discuss your situation before a loss happens!!

Is flooding covered under my Homeowner's Insurance policy?

Flooding is not covered by a homeowners policy. We can give you flood insurance for a reasonable cost. Remember all the problems throughout the country with flooding this year. If you are at any risk don't delay purchase flood insurance now!!

 

Is earthquake damage covered under my Homeowner's Insurance policy?

Earthquake damage is not covered. Unless you endorse your policy to provide coverage. The cost is small if an earthquake happens in our area. Scientists say earthquakes are likely to happen in Massachusetts. 

 

 

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