- Division of Insurance
Since 1995, the month of June has been recognized as National Homeownership Month to support homeownership opportunities and the dream and importance of being a homeowner. Massachusetts residents fortunate enough to own a home should also remember this month to review their homeowners’ insurance policies to ensure that their most valuable asset is protected if damaged or destroyed.
“Homeowners who have reviewed their insurance policies and know what coverage they have are better prepared to handle both the financial and emotional impacts of damage occurring to their homes,” said Division of Insurance Commissioner Gary Anderson.
Homeowners should check their policy’s Declarations page to understand their coverage limits and discuss with their agent or insurance company whether their home and personal belongings are covered to the fullest extent possible.
Obtaining the Right Coverage
Typically, the home is a resident’s most valuable asset and it is prudent to have adequate coverage to protect your home. Each year, before renewing a policy, homeowners should understand the cost of rebuilding should the worst occur. 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 material to rebuild a home.
In addition to choosing the type and overall limits to 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 is typically a set dollar amount, possibly ranging from $500 to $5,000. There may also be an additional deductible for catastrophic coverage, such as hurricane.
Consumers need 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 or general wear and tear are likewise not covered. Homeowners should discuss with their agent or insurance company obtaining flood insurance coverage from the National Flood Insurance Program or a private flood policy, even if outside of a high-risk area, as well as any endorsements 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.
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 insurance for their home. Should a loss occur, it should be reported to the insurance company as soon as possible. Homeowners should take steps to protect property from further loss or damage but should refrain from making any non-emergency repairs without first discussing with the insurance company.
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
About the Division of Insurance
The Division of Insurance is an agency within the Office of Consumer and Business Regulation. The primary mission of the Division is to monitor the solvency of its licensees in order to promote a healthy, responsive and willing marketplace for consumers who purchase insurance products. The Division is responsible for regulating Massachusetts’ $60 billion insurance industry and overseeing more than 1,600 licensed insurance companies and approximately 141,000 individual insurance producers. Protection of consumer interests is of prime importance to the Division and is safeguarded by providing accurate and unbiased information so consumers may make informed decisions and by intervening on behalf of consumers who believe they have been victimized by unfair business practices.