Multi Unit homeowners insurance

[Kathryn Baker]

Hi,

My husband and I are closing on our first multi unit house next month in Rochester, NY. It is a two unit house and we will live in one unit. I am shopping around for home owners insurance and want to make sure that we are getting good coverage and not just a cheap yearly price. Is there a rule of thumb for what kind of coverage we should get for insurance? There is not much I could find out there for what kind of coverage we should have for an owner occupied multi family.

Thanks!!  

[John Mocker]

Kathryn
Congrats on the new home. You are on the right track for the Homeowners policy. The best price may not be the best coverage. Many of the companies we write with in NY are adding options such as Service Line coverage (for the water, sewer, cable, etc. lines outside the house and under the ground), Equipment breakdown among others. depending on the pricing, they may make that companies policy higher but it may be worth it because of the addition of valuable coverage.

Can't help with a referral but I suggest that you interview several independent agents and get comparisons. You may want to quote your auto at the same time to see who can give you the best combined pricing/coverage.

Here are some things to look for from an Insurance prospective that my give you trouble obtaining coverage:

1.Any in-ground tanks (active or inactive)

2.Any Knob & Tube or Aluminum Wiring

3.If built before 1978, does the building have Lead Safe certifications

4.Any wood stoves or secondary heating units. If so, were permits pulled & were they installed by a professional

5.Are any of the homes rented to students

6.Is there a flat roof

7.are there asbestos shingles

8. age of systems:
- Heating systems
- electrical
- Plumbing
Some companies will not write properties with systems that have not been updated

The Year that the following were updated (either partially or fully) would be good to know:

- Heating systems

- Roof

- Plumbing

- electrical

Some companies will not write properties with systems that have not been updated.

As long as you are living there, the proper policy for a 1-4 family is a "Homeowners" policy.

Most homeowers or dwelliing/fire policies include:

1. Dwelling (Building coverage)

The limit should be based on the Replacement Cost of the building (cost to rebuild with

the same kind and quality excluding the foundation)

2. Contents (Personal Property): most homeowners policies give a set % of the Building

limit for Contents. Dwelling/Fire policies requrie that you request a limit for conents.

3. Detached Structures: for other buildings on the property (ie. sheds & detached garages)

Again, there is normally an included limit of 10% of the building limit. That can be increased

if needed.

4. Loss of Use / Loss of Rents: Normally, there is a 20% included limit. Loss of use is for

your additional expenses if you can not live there due to a covered claim (ie. Fire). The

Loss of Rents is for the loss of Rental income if the tenants can not occupy the house

after a covered loss.

5. Personal Liability: For claims due to Bodily Injury or Property Damage that you become

Liable for and which is covered under the policy. Companies normally offer limits up to

$500,000 but some offer $1,000,000. Buy the max.

6. Medical Payments: Provides coverage for an injury suffered on the premises. Does not

require proof that you were at fault. Used to keep small loses into becoming lawsuits.

Normally offered up to $5,000 but check to see if higher limits are available.

7. Deductible: This is not a coverage but rather your portion of a claim. Most better policies

will not have a deductible for either the Liability or Medical payments coverage. It will

apply to the other 4 coverages. You can select the amount of the deductible, usually

ranges from $500 to $5,000. The higher the deductible the lower your overall premium

but get quotes on all the deductibles you are interested in. Sometimes the incremental

savings from $1,000 to $2,500 or from $2,500 to $5,000 are too small to make the higher deductible worthwhile.

You may also be required to have a separate Wind or Hurricane deductible. You will probably not see that because you are not coastal.

There are many endorsements that are available on the homeowners policy. Without knowing the details I can not suggest which would be right to add on.

Several you should pay attention to are:

- Ordinance & Law: Provides additional building coverage to deal with rebuilding cost Increases due to changes in Zoning or Building laws

- Personal Injury Liability: Libel, defamation of character, wrongful imprisonment, etc. (normally recommended, especially if you are a landlord)

- Water Backup: For water damage due to the backup of Sewers or Drains.

- Personal Articles: Coverage for belongings that have a special or collectors value such as Jewelery, Furs, Fine Arts, Collectibles, etc...

Your age should not be a factor on the pricing but, depending on the company these other factors may get you credits:

- Insurance Score (company pulls certain info out of your credit report). It is not your credit score but generally better credit will result in a better score

- Time at your job

- Education level

- time at current residence