Disasters can occur anytime, which is why it is so important for homeowners to ensure that they have a homeowner’s insurance policy when they buy a new home. Several questions may arise when it comes to purchasing an insurance, such as what type of insurance options are there? How many insurance plans should I buy to provide a good coverage for my new home? Or is it possible to totally do without an insurance plan at all? Fret not, RealtyHop has compiled the relevant information that you need to know when you are about to get an insurance plan.
Why is it important to have an insurance plan?
Disasters and unexpected losses can occur at any time. It is essential for you to understand your insurance options and obtain coverage for your home. Buying an expensive apartment without an insurance policy would put you at a significant disadvantage. For instance, you may buy a house in Greenwich for $1 million, but the cost to rebuild it might be $3 million. The replacement costs and costs to hire professionals to re-install features in the house to the way it was before would definitely take a toll on your wallet. Moreover, some condo, co-ops and mortgage lenders may also state in their mortgage clauses that you would have to show a proof of insurance before they approve of your borrowing. Fortunately, there are a wide variety of insurance plans in New York that you can explore and purchase.
Types of Insurance Policies Available
Master Policy Insurance
The master policy insurance is usually provided by the condo or co-op board, which covers the common areas homeowners share with others from liability and physical damages. Examples of such common areas may include walkways, roof, and elevators. In deciding which insurance plan you should go for, the first step is to find out about your master policy insurance. Some buildings may have different bylaws which might make homeowners responsible for building upgrades or even for some of the common areas in the building.
Homeowners may protect themselves by getting a liability insurance which covers damages against financial losses from liabilities that’s imposed by contract or law. Living in close proximity to others might make your actions possible to affect others. This insurance essentially provides coverage for damages caused by you to the other units. Some of the bylaws may require homeowners to have a minimum level of liability insurance. However, even if it is not required, homeowners are also encouraged to have it as it usually doesn’t cost a lot and it provides great protection.
Loss Assessment Insurance
As another lost cost add-on insurance, the loss assessment insurance provides coverage for homeowners for being financially liable for property damages to the building and shared common areas. The insurance allows you to make a claim on property damages involving the buildings and the common areas. While the master policy insurance may cover the common areas, they are usually limited to a certain amount. Here’s where the loss assessment insurance comes in to cover the balance of the costs of building property damages.
Natural disasters are unpredictable and we’d never know when a flood will hit us. For homeowners, getting flood insurance will provide you coverage from flood events that may affect your homes, especially if you are living in flood-prone zones in New York City.
How do I decide on the number of insurance plans to purchase for my apartment?
For homeowners who have yet to decide on which insurance plans to purchase, information on different insurance packages are also available on the New York State Department of Financial Services site. We have summarized the information on the package policies in the table below.
While a monoline policy only covers one type of insurance for your home, package policies provide a more comprehensive coverage through different insurance plans in the packages. In addition, it is also generally less expensive than insurance coverages which are purchased separately.