What does homeowners insurance cost?

In Massachusetts, the average annual premium for homeowners insurance is $1,379 (about $115 per month). Even though this is a bit higher than the $1,173 premium for the average American homeowner, having insurance is vital in New England because winter weather and high winds cause serious damage to homes every year.

To calculate the cost of a homeowners insurance policy, insurance carriers look at factors like the age and location of the home. They start by asking how likely it is that something bad will happen. The more likely it is that something bad will happen, the more costly the home insurance policy will be. Potential disasters are referred to as “risk.”

Here at Anderson, Bagley, and Mayo Insurance, we work closely with many different insurance carriers to ensure that we’ll get you the right home insurance coverage at the best price.

What does homeowners insurance cover?

A basic homeowners insurance policy covers you in case a disaster strikes in your neighborhood and damages your home. Typical catastrophes include falling trees, fires, heavy winds, and burglaries. Homeowners insurance:

• Pays for repairs to your home AND your belongings
• Example: High winds cause a tree to fall on your house that damages your smart TV
• Pays for other people’s injuries or property damage when it’s your fault
• Example: Your child hits a baseball out of your backyard and it damages your neighbor’s mailbox
• Pays for temporary living expenses when your home is damaged
• Example: A tree falls on your house and damages your windows and roof. Insurance would cover a temporary hotel stay while your home is being fixed

Some things that aren’t covered by homeowners insurance and should be considered as add-ons are flood insurance (especially if you live near water) and sewer backup coverage.

How much homeowners insurance do I need to buy?

We recommend that you buy enough insurance to replace your home in the event of a catastrophe. That said, home insurance packages vary depending on your specific situation — it’s important to work with a trusted, reliable, knowledgeable insurance agent that can guide you through all decisions and any questions you have. ABM is also familiar with the local area, so we’ll know exactly what you need in terms of coverage. We’re happy to talk through the insurance buying process with you, and help you find the right coverage for your unique home.

Are all homeowners insurance policies the same?

Not all homeowners insurance policies are the same, and a basic/standard home insurance policy may or may not be sufficient for you. For example, if you have valuables like an engagement ring or fine art, you may need more than a basic policy for them to be properly insured. If you have certain breeds of dogs or a pool or trampoline in your backyard, your home insurance needs will be different.

Coverages and aspects also vary from one policy to another or one carrier to another. That’s why it’s important to work with local agents like ABM who work with several different insurance carriers to find you the best coverage with the right protection for your unique home.

How can I save money on homeowners insurance?

Our biggest suggestion is to work with a local insurance agent. They can help you bundle your insurance coverages together and save money, and make helpful suggestions on the exact coverage you need because they know the local area (and you!) so well. For example, combining your car insurance and home insurance, and even a small umbrella policy, with the same agent, can save you money in the long run. You can also receive discounts if you pay the first full year of your homeowners insurance up front.

Additionally, the home inspection is key. The inspector will help you identify hidden problems in the home, and alert you to repairs you will have to make to keep your home safe from damage. Your home inspector can also give you tips on how to improve the house in ways that will give you discounts on your insurance costs.

Finally, it’s helpful to have a good insurance history. This can save you money when you move on to home ownership. If you’re renting right now and just beginning the home search, be sure you have renters insurance. Insurance companies offer discounts to people who can show a loss-free claim history.

For the closing on our new home purchase we need an insurance binder — what does that mean?

Even though you don’t own the home before your closing, mortgage lenders typically want evidence of insurance, which is called a “binder”, a few days before the closing. This is another reason it’s good to start talking to your local agent about your homeowners insurance 30 to 60 days before closing.

A home insurance binder ensures the mortgage lender that you have secured the proper home insurance coverage for at least the first year of ownership. It includes an outline of the basics included in your home insurance policy, and is signed by your insurance agent. Usually it includes things like the name of your insurance carrier and agent, and the basics covered in your policy — things like dwelling, other structures, unscheduled personal property, and loss of use, and the coverage limits of each of these things.