- Division of Insurance
Spring is often the time of year when homeowners start much needed yard work, home renovations, or decluttering projects. As you consider your spring cleaning to-do list, at the top of your list should be a review of your home insurance policy.
Why do you need to review your policy?
It’s important to know your coverage limits and exclusions, and discuss with your agent or insurance company whether your home and personal belongings are covered to the fullest extent possible. Each year, homeowners should review the cost of rebuilding their home in the event of a disaster. As inflation drives up costs, it’s critical that you consider having a dwelling limit that is high enough to help you rebuild your home at today’s labor and material costs in the event of a total loss. You also need to consider coverage for any home additions or renovations, such as an upgraded kitchen, as well as whether any other family members have moved in which will mean you’ll need to factor in their personal belongings.
In addition to choosing the type and overall limits to your coverage, you should also re-evaluate your policy’s deductible, or the amount that you pay before the insurance company will pay toward any 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 weather events, such as hurricane or wind.
A list of companies offering homeowner’s insurance by county can be found here: Home Insurance | Mass.gov
Key coverages to consider:
Ordinance or Law Endorsement: Most homeowner’s policies do not provide coverage for the additional cost of repairs due to changes in building codes or ordinances enacted since the home was built. Some coverage may be available, for an additional cost, when you obtain this type of endorsement to may pay the extra cost to meet new or updated building codes or ordinances that did not exist when your home was first built.
Inflation Guard Endorsement: If the replacement cost of your home is increasing with inflation, your policy amounts must be periodically increased to maintain your coverage at 80% or higher of the replacement cost. To help you keep coverage at an adequate level, some companies offer an "Inflation Guard Endorsement." This endorsement will allow your insurance company to automatically change your policy limit during the policy period and upon each subsequent renewal policy by a pre-determined percentage.
Flood Insurance: Standard home insurance policies do not cover flood damage yet, if you live in a designated flood plain, your bank or lender may require it as a condition of continuing your mortgage. Depending on where your home is located in Massachusetts, you may be able to purchase flood insurance from a private insurer or through the National Flood Insurance Program (NFIP). Just because your home is not in a designated flood plain, don’t assume you will never have flood damage. For more information about federal flood insurance, you can contact your insurer or producer or contact the National Flood Insurance Program at 1-800-638-6620.
About the Mass DOI
The primary mission of the Massachusetts Division of Insurance 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. For more information about the Massachusetts Division of Insurance, please visit www.mass.gov/doi.