A few tips on what to look for when buying homeowners insurance along with markets to go to for those hard to insure properties.
Whether you live in upstate New York or downstate in New York City, here are a few basic tips for New York homeowners when buying insurance for your home:
- Keep up with your coinsurance: Coinsurance, commonly written for 80%, means that your policy limit must equal at least 80% of the property value at the time of loss. If you do not meet this requirement, you will suffer a coinsurance penalty. Notice, it says ‘at the time of loss’. If you’ve been with the same insurance company for 10 years and have never updated the value of your property, chances are your policy limit will not satisfy the coinsurance requirement. If you were to sustain a loss in year number 10, there’s a good chance you will be penalized at the time of loss.
- Know your valuation: There are two types of valuation, Replacement Cost and Actual Cash Value. Replacement cost is the cost to replace or repair your home with materials of similar kind and/or quality. Actual Cash Value valuation takes the replacement cost and applies depreciation. Replacement cost valuation is more favorable.
- Know your perils: You should know which perils are covered under your policy. There are two basic types of policies; named perils and all risk. Named perils, as the title indicates, means the only perils covered are t hose named on the policy. All risk, on the other hand, covers all perils except for those excluded from the policy. All risk, being the broader and more favorable of the two costs more, but is worth the additional cost.
Difficulty Obtaining Coverage:
In some cases it may be difficult to obtain homeowners insurance. If you are having a hard time insuring your property, websites below may offer some help:
- Coastline Properties: If you are a New York homeowner living by the Atlantic coast, and are having difficulty in securing insurance, you have the option of approaching the New York Property Insurance Underwriting Association (NYPIUA) . The NYPIUA consists of several insurance companies that provide property insurance in the state of New York. They pool together to share the risk. They do not offer ‘all Risk’ coverage. They offer coverage on a named peril basis (as discussed above). Although you may breathe a sigh of relief to have coverage, it does come at a premium. You can look to pay at least 20% more for your coverage than you would through an ordinary insurance market and coverage is more restrictive . This is an insurer of last resort. Visit their website for more information.
- Flood Insurance: For New York homeowners located in a flood zone, your homeowners policy will not respond to a flood loss. This coverage can be purchased from NFIP. Coverage amounts range from $35,000 to $250,000.
Be aware that you can view a New York homeowners insurance price comparison table that will give you an idea as to what the various homeowners insurance carriers are charging for insurance. Visit New York State Insurance Department for more information.