Monday, March 20, 2006

Homeowner's Insurance

This is the next thing looming large on my real estate to-do list. I have to get homeowner's insurance for the new condo-- I believe I have to have it lined up in time for the closing. I have an article from Consumer Reports with some ratings on various insurance companies, but other than that, I barely know where to begin. I tried one company's site to get an online quote but stopped when they started asking me about the construction of the building-- brick? Brick on top of wood frame? Geez, what if I get it wrong? Things like that make me want to speak to a live person instead.
Any pointers, anyone? This is a subject that a lot of the real estate books seem to touch on only briefly, if at all.


Anonymous said...

You might want to check with Allstate to get a quote. At least you'll have a starting point from a reliable insurer.

mapgirl said...

Your insurance agent should be able to look up the type of construction. That's what I was told when I got renter's insurance in college. They knew all about my residence when I gave them the address.

dakboy said...

My wife & I just purchased a house in January and there is no substitute for calling a real, live agent on this stuff.

The agent has been through this hundreds if not thousands of times. They can help you answer the questions that you might not know the answers to. If the building is brick on a wood frame, they know how to classify that. Even seemingly little things like your flooring materials and wall types (drywall vs. lathe & plaster) will come up. This is to help figure out the true replacement cost of the home. That's probably more critical in the case of a standalone structure like our house - while we paid $100K for the house, the policy is written for $207K to restore the structure to pre-disaster condition should we suffer a total loss.

I called a broker (does the shopping for you) as well as calling a few agents directly. Quotes varied widely. I was quoted $900 by Travelers via a broker, and under $600 by Allstate. State Farm came in between them, and he also tried to sell me a whole bunch of other services before I'd even made a decision on the homeowner's. I think I called Nationwide as well but they couldn't get me a quote fast enough.

I ultimately went with Allstate. They got good reviews from a co-worker and the multi-line discount was a nice touch. It also helped that they quoted me a 40% reduction on our annual car insurance premium vs. Geico.

Two things that tripped me up - get the "insurance binder" to the mortgage company or bank's attorney before closing. And you will have to pay the first year's premium up front. Take care of all of this well ahead of your closing date - plan on getting it done at least one week, preferably two, before closing.

dakboy said...

Oh, I forgot to mention...make sure the insurance quote has the details right on your home!

Our house has had 2, maybe 3 expansions/additions put on over the 135 years it's been standing. We saw 3 different numbers for square footage. 1250, 1600 and 1934. I was read all 3 of those in my search for insurance. And every time, I had to explain the history of the house.

Even worse, after we were in the house for 6 weeks, I got a credit from Allstate on my credit card - they downgraded the replacement value of the house because it was smaller than I'd originally told them (they moved it from 1934 back to 1600). I had to call my agent again and tell her that yes, it really is the larger size, and please put my policy back the way it was.

Anonymous said...

I've been very happy with Amica. They have consistently had the highest customer satisfaction records and their prices are very competitive. in fact, this year my insurance costs have DEcreased 35% for the same coverage from Amica.

Anonymous said...

I've been living in my coop now for 1.5yrs and buying insurance has been on my list for 2 years, but I just never got around to it. I'm probably never going to buy it at the rate I'm going at.

Single Ma said...

Hey Madame X, I'm in the same boat. I'll be closing in a few more weeks (fingers crossed), so I'm on the prowl for hazard ins rates. I was also confused about the detailed questions. One company asked me the value of the house minus the land. I was like "how am i supposed to know that?" The builder told me that info won't be available until after the appraisal. *sigh*

So without exact info, I've tried to collect various estimates. What I've found is that many of them want to know your ss# to see if you've ever filed a claim. I don't feel comfortable giving out my social just to get an estimate so I quit my search (temporarily). If I find anything interesting when I start looking again, I'll post it on my blog. In the meantime, I'm going to follow your homebuying process too.

Have a great day!

Anonymous said...

go through your auto carrier, they'll give you a discount, presuming you have an auto. and as for nyc money up top, i would get renter's insurance (technically thats what they call coop insurance since under their standards you are renting from the corporation. if you have a leak come through your roof from the yahoo on top, and you have no insurance, you are screwed. similarly, should your bathroom or other faucet leak down to the apartment below or some other intrusion on to the apartment next to you, that is a huge expense. frankly, you should get an umbrella policy to cover all suits.

Madame X said...

Unfortunately I do not have a car so I don't have auto insurance. I do currently have renter's insurance, but I got it through my bank as sort of a packaged offer, which was fine for basic renter's coverage but not for homeowner's insurance on a condo, where you have real property of your own to cover, unlike with a coop.
The companies I'm most interested in, based on the Consumer Reports ratings, are:
#1 Amica
#2 Chubb
#3 Hartford
#4 Nationwide
#5 Erie
#6 State Farm
#7 Liberty Mutual

James L said...

Madame X,

Because you're buying a condo, the bank needs to see that the condo is insured. Your bank should get the condo insurance from the sponsor. Your unit's insurance is unneccesary during closing. That's been my experience.

Anyway, my unit's insurance (coverage for anything within the walls of my unit only), costs 250 a year from allstate. Charles Randazzo on Court Street.

mapgirl said...

Per James' comment, the bank was satisfied with the HOA's building insurance for the purpose of the loan. Just as the HOA for a certificate of insurance. They should be able to get it to you quickly. But you should still insure your stuff inside your unit, much like renter's insurance. I admit, like NYC Money I have yet to buy it too, but I often think about it.

Madame X said...

Thank you all for the great comments, very helpful.

IRA said...

My condo policy is with State Farm. In addition to talking to a live agent, you might want to contact the property manager or the president of thecondo association. Our building property manager agreed to fax two documents directly to my agent. The first document was a summary of the condo association's insurance policy, which prompted my agent to increase my policy limits. The second document indicated that we have sprinklers throughout the building, which resulted in an added discount on my premium.