Boston Real Estate for Sale

Boston Real Estate for Sale


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

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

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.

 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 with 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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