Home Insurance Policy Definitions
Can pay for damage to your house and to structures attached to your house.
Can pay for damage to structures not attached to your house.
Reimburses you for the value of your possessions (depending on your coverage).
Loss of Use
Can pay for living expenses while your home is being repaired.
Can cover financial loss if you are found legally responsible for injuries or damages to someone else.
Can pay medical bills for people hurt on your property.
Insurance For the First Time Home Buyer (Everything you need to know)
Buying your first home is an exciting and sometimes stressful experience. Purchasing homeowner’s insurance may seem like another long-lasting, daunting task, but it doesn’t need to be, and with a good agent, it’s not. At PRI, we work with a lot of first time home buyer clients and have found similar questions and confusions arise.
In order to de-mystify, we’ve created an infographic and included more information as well as FAQs for all prospective home buyers out there. Based in Peabody/Danvers, MA, we’re here as a resource for you and are happy to serve our New England community’s needs. If you have any questions, please don’t hesitate to reach out.
First Time Home Buyer Insurance Key Facts
Why do you need homeowner’s insurance?
To protect your assets and future income
Homeowners insurance can cover the structure of your home, personal property, and protect you from liability exposures, such as injuries occurring on your property.
To satisfy your mortgage lender at closing
Your mortgage lender will require you to have homeowner’s insurance paid in full to close.
What kind of insurance do you need if you are buying a condo?
Master Policy (the shell of the building, common areas)
Each Master Policy is different, your agent will analyze it for you and address your needs.
HO-6 policy (inside your unit)
Your condo policy will reference the coverage in your master policy.
What do I need for insurance on closing?
In order for your closing to go smoothly, you need to have obtained a home insurance policy, paid it in full for the first year, and have your agent provide a binder to your mortgage company with all of the proper requirements fulfilled in time for closing.
Can I obtain homeowners insurance online with a national carrier?
Yes, but issues are more likely to arise. We’ve seen situations when clients have obtained insurance with a national carrier, only to have something wrong with the policy, and the closing held up as a result. By the time they come to us, they are frustrated and confused.
With a local, independent agent, we have multiple companies/carriers to quote your home with and more “authority.” Therefore, our prices can be more competitive, but more importantly, you are getting the advice you trust, and smooth sailing for the most important purchase of your life. Having the wrong coverage is like lighting money on fire–it won’t work for you when you need it.
How do I find a good independent insurance agent?
- Support your local community and receive better service with a local agent (no it doesn’t cost more!).
- Direct, national writers have good rates at first, but fewer options, lower coverage, and less clout in the case of a claim.
- Ask for personal recommendations from your realtor, lawyer, family & friends.
- Google insurance in your area, read the reviews and find someone you feel comfortable with.
Frequently Asked Questions
What is the difference between Replacement Cost and Actual Cash Value (ACV)?
Replacement cost is typically required by lenders, it covers the cost for getting a good of the same quality and kind. Actual cash value considers wear and tear. It pays for your loss but often doesn’t pay enough to cover the replacement cost.
What is an endorsement?
Endorsements are the backbone of your policy, they allow you to increase or add coverage. Often, the additional coverage saves you from a large out-of-pocket expense in the case of a claim. Ultimately, they customize coverage. There are many packages out there to fit your specific needs
How do I get the most inexpensive homeowners policy?
The key here is to maximize value.
- Bundle your auto & home policies = larger savings
- Higher deductible = lower premium
Why do I have a deductible?
To prevent the filing small claims. If you have a $500 deductible, the damage will need to exceed $500 in order for your policy to kick in. Same goes for a $1,000 deductible and so on.
What if my dog is on the "no-dog" list?
Some carriers are stricter than others, but if no insurance company will take your adorable pooch, we can place you in the Massachusetts FAIR plan.
How does payment work for insurance if my loan is in escrow?
Your agent will collect payment in full from you for the first year and submit a binder confirming payment to your mortgage company. On your renewal, if your acccount is in escrow, your mortgage will pay it on your behalf. IF your mortgage is sold, alert your insurance agent as soon as possible.
Do I need an umbrella?
We say anyone with assets to protect or future earnings to protect should consider an umbrella policy.
Should I have a flood policy if I'm not in a flood zone?
We recommend you highly consider it as flood policies are relatively inexpensive (when not required), and covers your home for exposures your homeowner’s insurance policy does not.
Should I keep an inventory of my personal belongings?
We always recommend our clients keep track of what they own. In the case of a loss, the more receipts, appraisals, etc, the better. Home inventory apps such as Sortly can help you keep track.
First Time Home Buyer Insurance Service Area
Phil Richard Insurance, located in Danvers, MA, offers Insurance services to indviduals and businesses in the North Shore of Massachusetts including but not limited to Danvers, Peabody, Beverly, Salem, Newburyport, Ipswich, Rockport, Gloucester, Marblehead, Swampscott, Amesbury, Georgetown, Lynnfield, Middleton, Hamilton, Wenham, Greater Boston Area, and more. We also serve New Hampshire, Connecticut, and Maine.