Without homeowner's insurance, that money has to come out of your pocket.  But if you're insured, you can file a claim to pay for the damage and help rebuild your home.  Your homeowner's insurance will also cover theft of your personal belongings, including when you take them with you in your car or while you travel.

 

In the even you suffer a loss, whether from burglary, fire or a severe storm, call our agent to begin the claims process.  A claims adjuster will work with you to assess the damage and determine your compensation.

 

Is homeowner's insurance required?

Unlike auto insurance for motorists, homeowners in Connecticut are not required by law to purchase homeowner's insurance.  However mortgage lenders require that home buyers maintain homeowner's insurance for the duration of the loan.

 

Why is homeowner's insurance important?

Homeowner's insurance is important for a variety of reasons:

• If you're insured, any significant repairs or rebuilding after a disaster can potentially be covered by your insurance policy, up to your set limits.

• If you owe money on your mortgage and your home is completely destroyed, you will still be required to pay your home loan, unless you have adequate homeowner's insurance.  Homeowner's insurance can help pay for the rebuilding cost.  If you insure your house at full replacement cost value, you will have the means to fully rebuild, if needed.

• Liability coverage is arguably the most important aspect of homeowner's insurance.  If something happens to a visitor on your property, your liability coverage can cover that person's medical costs, as well as your legal fees if you are sued.  Lawsuits are expensive and hiring a lawyer can be thousands of dollars.  If you are found responsible, you could be ordered to pay large sums of money in a personal injury suit, a cost than be offset by your liability coverage.

 

When should I get homeowner's Insurance?

You will need to purchase a homeowner's policy before the lender will allow the closing to proceed.  Otherwise the loan won't be finalized and funded.

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When you think about it from the lender’s perspective, it makes a lot of sense. In a typical mortgage scenario, it’s the lender who puts up most of the money for the purchase. The borrower pays much less, in the form of a down payment. So the bank or mortgage company becomes the majority “stakeholder.”

 

According to Wells Fargo: “Homeowners insurance can protect you financially from fires, natural disasters, theft, and other events. It also protects our interest as your mortgage servicer.” This is why most lenders require proof of coverage before closing. They want to make sure their interests are being protected in the event of fire, flooding, (earthquake option), etc.

The common practice is that you have to bring a homeowners insurance binder with you to the closing procedures. This binder is provided by the insurer and is proof that you have a policy in place that covers the property. In some cases, a letter from the insurer will suffice, or a photocopy of the coverage document(s).

 

Is homeowner's insurance included in your mortgage payment?

Homeowner's insurance is not included in your mortgage unless it is requested.

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Can your homeowner's insurance be cancelled?

Yes, your insurance company can drop you, but it's important to know that being dropped (considered a non-renewal) is different from being cancelled. 

 

When you are dropped by your insurance provider, your insurance policy is not renewed at it's expiration date and you must pursue another provider.  You will be informed if your policy is going to be dropped so you have adequate time to shop for new coverage. Your homeowner's insurance can be canceled at any time as long as you are notified that it will be occurring.  During the first 60 days, the insurance company can cancel for a variety of reasons.

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After 60 days, the reason for cancellation must be due to a specific circumstance such as non-payment, misrepresentation or increase in risk. You'll typically receive a cancellation notice 10 to 30 days in advance of cancellation, depending on the reason your insurer cites.

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How much homeowner's insurance do I need?

Make sure your homeowner's insurance covers:

• Structure of the home. Insure your home for it's replacement value.  This is how much it would currently cost to re-build your home from scratch.

• Personal belongings: Most policies cover your personal belongings at 50 to 70 percent of your home's value.  Conduct an inventory of your personal belongings to find out how much coverage you need and insure them at replacement cost (we can help determine that).

• Liability: A basic policy might include $ 100,000 to $ 300,000 of liability coverage. Considering the cost of peronal injury lawsuits, you may want to purchase liability insurance with higher limits ($300,000 to $500,000 or higher).

• For additional protection and peace of mind, consider buying an umbrella policy, which can add another $ 1 million or more in liability coverage. (An umbrella policy is an excellent way for anyone to increase liability protection, but it's an especially good idea for anyone with many assets.).

 

Is homeowner's insurance tax deductible?

Your insurance premiums are not tax deductible except under special circumstances.  You do receive other tax benefits as a homeowner, but they are not related to homeowner's insurance

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