On the Topic of Homeowners Insurance Coverage

by Jordan Roorda, Protect NY Principal Agent – 12/10/21

Fun Fact: CNY has some of the cheapest home insurance in the US! Sure we get snow and cold winters, but we largely avoid the disasters that happen in other parts of the country like tornadoes, wildfires, hail storms, and hurricanes (knock on wood).  This is reflected in our average home insurance rates.  In states like Texas and Florida, home insurance bills easily average more than $2,000 a year.  Here in Central New York, most home insurance bills are a fraction of that.

To pay more now or pay more later?…That is the question.  Not every home insurance policy is built the same way.  Do you select a low-cost, low-coverage policy? Or a higher-cost, better coverage policy?
While we would all like to pay as little out of pocket as possible during a claim, there are many advantages of choosing a higher deductible plan.  If we go back 30 or 40 years, it was common to see a $100 or $250 deductible on home insurance.  Nowadays, deductibles of $500, $1000, even $2500 are becoming more popular with insurance companies and customers.  

The higher deductible saves money on your premium but also encourages you to pay out of pocket for smaller claims which will help you avoid a claim surcharge from your insurance provider.  Claim surcharges are around 25% for up to 3 years after a claim.  With that said, it almost always makes sense to file a claim when the damages exceed a few thousand dollars.

Best “bang for your buck” coverages

Besides the major coverages like fire and wind storm, what are some important coverages to consider?

Service Line. One of the newer coverages to come out in recent years is the optional service line endorsement.  Living in central New York, our cities tend to have older pipes in the ground for water, sewer, and gas.  We’ve probably all heard a horror story of someone that has had to dig up and replace a damaged underground pipe, and then fight with the utility company or the city over who will pay for it.  Up until recently, homeowners insurance would not cover these types of claims.  Now, many insurance companies offer inexpensive coverage that may cover the cost of replacing that line.  As always, talk to your agent about your coverage options as this is usually available for a small additional cost. 

Sewer Backup.  Another inexpensive, but important optional coverage is sewer backup.  A typical homeowners policy will not include sewer backup coverage, but it is one of the most common claims.  Even if you have an unfinished basement or have renters insurance, you may find yourself in a messy situation without sewer backup coverage.
The best “bang for your buck” would be to make sure you are not overpaying for the right coverage by shopping around every few years.  We see ads all the time that say “you could save hundreds of dollars by switching auto & home insurance.”  This is true, but often not because one company beats all the others in price, but because of timing.  If you’ve had the same insurer for more than 3 years, it’s recommended that you obtain comparison quotes from multiple companies to make sure you are still getting the best deal.