Get the answers to six common questions.

Insurance is one of those things that most people have in some form or fashion, but it’s still something that can cause a lot of confusion. If you are planning to buy a home, you’ve probably given some thought to homeowner’s insurance, and almost certainly you have some questions. Let’s discuss some New York home insurance FAQs:

Do you even need homeowner’s insurance?

Contrary to popular belief, you don’t legally need to have insurance for your home, as you do for your car. However, if a bank or other lender will be putting up some of the money for your house, most likely they will require you to get insurance. But once you’ve paid off the mortgage, you can do what you like with the policy.

What does home insurance cover?

A typical policy covers your home and possessions inside from things like fire or storm damage. Theft is usually included as well. In addition, the personal liability component protects you in the event someone gets injured while in your home or on your property.

What about floods?

As many people find out the hard way, homeowner’s insurance does not cover flooding. If your home is in a designated flood zone and you have a mortgage, you will be required to get a separate flood policy. Even if you aren’t in a flood zone, you may want to check out the history of the area to learn about any past incidents of flooding to see if a flood policy would be beneficial.

Why do some people get supplemental policies for their home insurance?

While a basic policy provides good coverage, there are limits to the money you would receive if you were to make a claim. If you own expensive jewelry, antiques, or high-end appliances or electronics, you may not be covered for losses or able to get enough money from your insurer to cover these items in the case of damage or theft. In this instance, a supplemental policy or additional coverage are good options. The same is true if you have a dog considered a high risk of causing injury. Your home insurance does cover dog bites, but an umbrella policy offers additional liability protection.

How much coverage is needed?

To figure out how much coverage you need, you have to look at different factors, with the main one being the cost to rebuild your home. You also have to think about your possessions. It’s a good idea to take an inventory of your items to determine how much they are worth. (This inventory is also great to have if you ever need to make a claim.) A clear understanding of how much it would cost to rebuild your home if it became a total loss is essential, as most providers require that you maintain a minimum insurance-to-value ratio.  Failure to maintain the minimum can result in the carrier paying a pro-rata amount of a covered loss.

Is it possible to cut home insurance rates?

Most homeowner’s insurance policies are very affordable, but there are things you can do to lower your premiums. Many companies will cut your rates if you have deadbolt locks and smoke alarms. Adding an alarm system may also give you a discount. You should also see if bundling different policies – like home and auto – could save you money.

If you have any other questions about New York home insurance, feel free to get in touch with NICRIS. We will also gladly talk to you about our insurance solutions and what we can offer you personally or for a business. You can call our office at 516-544-0006 or send us a message through our website.