The premiums charged for homeowners and tenants insurance vary widely from company to company, so it pays to take the time and effort to shop around in order to get the best value for your insurance dollar.
The cost of homeowners and tenants insurance depends on a number of factors including location; age and type of building; the use of the building, i.e., residence and/or commercial enterprise; local fire protection; choice of deductibles; application of discounts; and the scope and amount of insurance coverage you purchase.
A brick building, for example, is more resistant to fire than a frame building and, consequently, costs less to insure against fire. The building’s location also has a bearing on the cost of fire coverage, because some communities have better fire protection than others. Also, some areas have greater crime and vandalism problems than others, which also affects the cost of insuring against such losses.
Each of New York City’s five boroughs constitutes a separate rating territory for homeowners insurance. In the remainder of the State, rating territories are based upon the quality of the community’s public fire protection, ranging from Class 1 (the best protection) to Class 10 (unprotected).
If your policy contains a standard all peril deductible, such as $250, you would collect the amount of any covered property loss, less $250. With a deductible, the premium cost of your policy is lower than if there were no deductible. In choosing the deductible amount, you bear the burden of loss up to the amount you feel you can afford. Deductibles save money because the first dollars of the insurance are the most expensive to buy. Contact your insurance company to see if they offer higher deductibles, such as $500 and $1,000, on your homeowners insurance coverage.
Hurricane deductibles are a relatively new feature in homeowners’ policies. Insurers began offering or requiring hurricane deductibles following a series of catastrophes in the late 1980’s and early 1990’s, that caused major losses. The hurricane deductible is in addition to the standard all perils deductible contained in the homeowners policy.
Examine your policy carefully because many insurers require a hurricane deductible on homeowners policies depending on the location of the insured property. Most insurers who use these deductibles require them on insured properties located in Nassau and Suffolk counties and the five counties that make up New York City. In addition, several insurers require the deductible for the coastal areas of Westchester county.
A hurricane deductible is usually expressed as a percentage of the insured value of your house. The Department requires insurers to also express it as a dollar amount on the declarations page of any policy to which it is attached. For instance, if your home is insured for $150,000 and a mandatory 5% hurricane deductible is applied to your policy, you would be responsible for the first $7,500 of any loss as the result of a hurricane. If a hurricane causes $10,000 worth of property damage to your home you are responsible for the first $7,500 and the insurer is responsible for the remaining $2,500.
You should also check with your insurance company to see if they offer premium discounts for the use of dead bolt locks, smoke alarms, fire extinguishers, sprinkler systems and security systems. Insurers are required to offer premium discounts if a policyholder has installed hurricane/storm shutters and/or hurricane resistant laminated glass windows and doors. All of these devices minimize losses and in some instances, may deter them.
Some companies offer what is called a multi-policy discount. If you purchase your homeowners and automobile liability policies from the same insurer, you may receive a small discount. In addition, you can probably purchase a personal umbrella policy with liability limits of $1,000,000 or higher over your homeowners and automobile liability policies which might also be subject to a multi-policy discount.
