- Division of Insurance
The month of June is recognized as National Homeownership Month. Massachusetts homeowners are encouraged to take a moment this month to review their homeowners’ insurance policies to ensure that their most valuable asset is protected if damaged or destroyed.
Purchasing the Right Coverage
It is prudent to have adequate coverage to protect your home. Each year, before renewing a policy, homeowners should understand the full cost of rebuilding in the event of a total loss. This includes factoring in renovations or additions to a home, changes to personal property, including furniture and electronics and the cost of today’s labor and materials.
Homeowners should check their policy’s Declarations page to understand their coverage limits, particularly the dwelling limit referred to as Coverage A, and discuss with their agent or insurance company whether their home and personal belongings are covered to the fullest extent possible. The Division developed a guide to understanding your Declaration Page.
Your Deductible
In addition to choosing the type and overall limits of your coverage, homeowners must consider their policy’s deductible, or the amount that the homeowner pays before the insurance company will pay toward any loss. Although premiums are lower with higher deductibles, homeowners will be responsible for paying out-of-pocket up to the deductible if there is a loss. The deductible for a homeowner’s policy will be shown on your declarations page. There may also be additional deductibles for catastrophic coverage, such as hurricanes, or for wind/hail losses.
Exclusions
Homeowners need to also be aware that standard homeowners’ policies do not cover every type of damage that can occur (covered perils vs exclusions). A standard homeowner’s insurance policy does not cover flooding and, generally, mold and other fungi resulting from slow leaks. General wear and tear are likewise not covered. Homeowners should also discuss with their agent or insurance company if they should consider obtaining flood insurance coverage from either the National Flood Insurance Program or a private flood policy, even if they live outside of a high-risk area. There may also be endorsements that can be added to the policy that may provide for coverage for perils not covered in a standard policy, for example, coverage for backup of sewers and drains that cause flooding in your basement or for a home heating oil leak.
What to Do if There is a Claim
While preparation is essential, sudden and unexpected losses are the reason why homeowners are encouraged to maintain adequate insurance for their home. Should a loss occur, it should be reported to the insurance company as soon as possible. Read your policy and keep a copy of it in a safe place that is accessible even if you are unable to enter your home. The Division of Insurance has a Post Disaster Claims Guide that can help you navigate this difficult period.
When filing for large property claims, consider hiring a public adjuster to assist with the process if you are unsure or overwhelmed, and when hiring someone to do repairs, you can ask the company for a list of preferred contractors, or vendors, or find your own. It is imperative that homeowners check the license status of any professional hired to perform repairs to their home with the appropriate state licensing agencies.
Consumers with questions or concerns about their insurance coverage are encouraged to contact the Division’s Consumer Services Unit at 617-521-7794 or visit the Division’s website at https://www.mass.gov/home-insurance
