Massachusetts homeowners insurance

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Massachusetts homeowners insurance buyer's guide

More than 7 million people live in Massachusetts. A little over 63% of them own a home. At over 70%, the majority of those homes are worth between $300,000 and $1 million. Accidents, crime and natural disasters put those homes at significant risk. Massachusetts homeowners insurance provides financial protection.

Massachusetts home ownership risks

Winter weather, tropical storms and floods are some of the top risks Massachusetts homeowners face. In October 2012, Hurricane Sandy's high winds and coastal storm surge caused $300 million in property damage.

There have been 2,080 recorded wind events in Massachusetts, with Category 4 Hurricane Earl being the most severe. This 2010 storm, which had maximum wind speeds of 215 mph, damaged over 2.1 million properties in the state.

Severe winter storms, such as the 2015 storms that caused more than $1 billion in damage, are a more frequent threat. Both tropical and winter storms can increase flood risk. About 16% of the properties in Massachusetts have a 26% or higher chance of experiencing a severe flood in the next 30 years. Climate scientists project that extreme precipitation events will more than double over the next century, which could result in substantial increases in coastal and inland flooding in the state.

Massachusetts homeowners insurance coverages

There is no legal requirement to purchase homeowners insurance in Massachusetts. However, if you have a mortgage on your home, your lender may require it. Homeowners policies package together several types of coverage.

Dwelling Coverage

Dwelling coverage pays to repair or replace your home when a covered cause of loss damages or destroys it. Most homeowners policies cover losses from all perils that are not specifically excluded. However, some less broad policy forms only cover damages from the perils specifically listed in the policy.

Replacement Cost versus Actual Cash Value

Replacement Cost pays to repair, rebuild or replace your dwelling at the current cost of construction. Actual Cash Value policies pay the replacement cost less depreciation, which may not be enough to repair or replace your home.

The broadest homeowners policies typically cover the structures on your property at Replacement Cost and your personal property at Actual Cash Value. However, insurance companies often offer endorsements that cover personal property at their Replacement Value for an additional premium.

Other Structures

Other Structures coverage pays for damage to structures on your property, such as garages or sheds, that are not your main dwelling. The limit for this coverage is often a percentage of your dwelling limit.

Contents

Contents coverage pays to repair or replace your personal belongings, such as furniture, clothing and electronics. However, policies typically limit coverage for certain types of property, such as collectibles and jewelry. You may need to add an endorsement to fully cover this type of property.

Additional Living Expenses

Some policies call additional living expenses coverage Loss of Use. This coverage pays for temporary extra expenses that you incur because of a covered cause of loss. For example, if you cannot live in your home because of fire damage, this coverage may pay for you to live in a hotel and for meals during the repair process.

Liability Coverage

If you or a family member negligently injure someone or damage their property, your Liability Coverage pays for your financial obligation to that person. However, liability due to auto accidents or business operations is typically excluded.

Medical Payments

Medical payments coverage provides a small amount for the medical expenses of a non-household member who suffers an injury on your property. You do not have to be at fault for the injury to use this coverage.

Flood Insurance

Most homeowners policies exclude coverage for flooding. However, you can purchase this coverage separately in a policy from an insurance company or from the National Flood Insurance Program.

Earthquake Coverage

While there have been over 400 earthquakes in Massachusetts between 1668 and 2016, there were only two years in which earthquakes caused significant damage. Homeowners insurance usually excludes coverage for earthquakes. If you want coverage for this peril, you may be able to add it to your policy for an additional premium.

Average cost of Massachusetts homeowners insurance

Massachusetts homeowners pay an average of $985 per year for homeowners insurance, which is about 30% below the national average. Massachusetts ranks in the lowest third most expensive states for homeowners insurance rates.

Massachusetts residents enjoy relatively low homeowners insurance costs, but it still pays to assess all of your ooptions. Find the best rate on the coverage you need by comparing quotes from different companies from VIU by HUB.

Factors that affect Massachusetts homeowners' insurance rates

Multiple factors can affect how much you pay for homeowners insurance in Massachusetts.

Location

The crime rates, type of weather and other risk factors where you live affect your rates. Coastal properties may cost more to insure because of the higher flood and wind damage risks. Additionally, higher average home values tend to yield higher premiums. Areas with lower risk factors tend to have lower rates.

Fire protection

Homes that are closer to fire departments and fire hydrants usually cost less to insure. Homes in rural areas may carry higher rates because they are farther away from water sources and fire departments. Additionally, fire departments in rural areas may rely on volunteers and have fewer resources.

Liability risks

If you have a swimming pool, trampoline or a certain breed of dog, you may pay higher rates because of the liability risk associated with these items. Some insurance companies may exclude coverage for some types of risks.

Characteristics of your home

If your home has unique custom features or expensive materials, your rates will usually be higher. Additionally, older homes often cost more to insure because they can be more prone to leaky plumbing or electrical issues that can start fires. However, you may be able to save money by installing fire protection systems, upgrading out-of-date fixtures or utilizing fire-resistant building materials.

This information is intended for general informational purposes only and is not intended to constitute legal advice.

Sources:

Census.gov

Risk Factor

Risk Factor

State Climate Summaries

Massachusetts Department of Insurance

NESEC