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Homeowners insurance is a must-have. People purchasing their first homes represented 31 percent of all buyers, according to the National Association of Realtors. Among the many steps in the process is purchasing homeowner’s insurance.

Boston condo buyers — especially first-time home buyers — often don’t think about budgeting for home insurance when looking for their dream home, but they should

Boston downtown real estate buyers should start looking for a home insurance provider as soon as they have a contract accepted to buy a home.

Most mortgage companies require proof of insurance before closing

Below are a few tips to know for Boston condo buyers

When you’re buying a Boston Seaport condo for sale, there’s a lot going on. Nailing down your insurance policy and provider. So it’s important to know what you’ll be looking for in terms of coverage level and annual cost.

Here are the main items for comparison that should be standard in your home insurance coverage for your Boston condo

1. Dwelling Replacement: This is the amount the insurance company will cover if your home is damaged or lost due to fire or hurricane. (You need separate policies for earthquake/flood insurance). The coverage is based on square footage, location, and other factors such as attached/detached garage, fireplaces, etc. You essentially want sufficient coverage so that if you had to rebuild your house, the insurance would pay for that. Insurance companies have their own formulas for calculating replacement cost, and it’s important to note that the number is not based on the market value of the property. It does not include the value of the land. You may also want to consider bumping up the amount of coverage by adding on extended dwelling coverage. This is a less expensive way to increase the cost allowed for a rebuild and boosts the overall amount the insurance company would pay toward replacing your home. Here’s more on the extended dwelling.

2. Personal Property: This portion covers personal items and household contents due to theft, fire, vandalism, or other perils outlined. It’s advisable to take an inventory of all your belongings so you have an idea regarding how much coverage you’ll need. Better yet, have receipts, photos, or other proof of ownership for these items in case you need that information.

3. Loss of Use: This is coverage that provides for your living expenses in case you have to relocate due to a claim while your house is being repaired. Standard policies usually provide coverage for about 20% of the dwelling coverage.

4. Personal Liability: In the event that someone has an accident on your property, you’ll want coverage against lawsuits. A standard policy typically covers $100,000 for each liability claim occurrence. If you have anything on the property that might increase risk in some way (i.e., a pool) you might want additional coverage. Very important: Personal injury is not automatically covered under personal liability. Make sure your policy includes personal injury, as well.

5. Medical Payments: This helps cover the cost of medical payments for which you might be held responsible if someone gets hurt on the property, but doesn’t want to sue you.

An important tip: Don’t go with the least expensive policy you can find. Because if you compare coverage side by side among the providers you survey, you may find that you’re falling short on necessary coverage when you’re trying to save a few bucks.

Know what your condo policy does and doesn’t cover.

 Homeowners’ insurance protects against most common exposures like water damage, electrical fires and roof leaks, but maintenance issues like mold and pest infestations usually aren’t covered, according to Gatewood. “You may need special coverage for items like fine art, a wine collection or antiques that typically aren’t covered either,” wrote Gatewood.

Check the insurance company’s rating.

 A rating is an independent assessment, usually by A.M. Best or Demotech, of the company’s financial standing, according to Harper. “A good rating means the company can meet its claim obligations even after a widespread disaster,” Harper wrote.

Pick a high-enough deductible.

 When selecting an insurance policy, homeowners need to make sure they’re covered in the wake of a catastrophe that could fully wipe out their home and belongings, wrote Gatewood, but to save money, buyers should choose as a high a deductible as they can afford.

Gatewood recommends choosing a deductible of $2,500 and only filing a claim for something worth more than that amount. Harper wrote that buyers should make sure they budget for their deductible in case they have a claim and to have an emergency fund that also covers small repairs that cost less than the deductible.

Look for discounts.

 While there are common home insurance discounts, they aren’t standardized across the industry, wrote Harper. Most companies offer at least a 5% discount for security systems. Water mitigation systems like automatic water shutoff valves and leak sensors can qualify for discounts, too.

Add liability protection. 

Every homeowner should have at least $100,000 in personal liability coverage, enough to cover common claims like a slip and fall accident on the property. “If you have a swimming pool or have a high net worth and could be a target for frivolous lawsuits, it may make sense to increase your liability coverage above that minimum,” Harper wrote.

Don’t forget to buy enough loss-of-use coverage. 

Coverage for your living expenses, if you must relocate while your home is being repaired, is part of most standard homeowner insurance policies. “We typically suggest that homeowners have about 20 percent of their dwelling coverage in loss of use (also known as additional living expenses) coverage,” Harper wrote. “So, if your home is insured for $300,000, you’d have $60,000 in loss-of-use coverage.”

When you buy a condo, if you get a mortgage loan, the bank will require you to show proof of insurance.  Proof of master insurance.  Meaning, the common areas are covered by insurance.  However, the master insurance policy does not cover the interior of your unit.

You need to have your own insurance policy.  Trust me.  I had a friend who lived in the basement of a five-story condo building.  There was a fire upstairs.  Water seeped through, all of his furniture was destroyed, as were all appliances.  And the flooring.  And the walls, for that matter.

Master insurance covered the repairs to the walls, the floors, and the appliances.  (Of course, the insurance only covered replacing low-quality fixtures.  Other owners upgraded, but it was out of pocket.)  My friend had his own insurance, which covered replacing destroyed furniture, beds, and bedding, etc.

Contact us at 617-595-3712 to find to set up an appointment to start your Boston condo-buying process.

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