Two of the Most Common Types of Home Insurance You Should Know About
There are many multi-family homes in Worcester, Massachusetts. You may live in an apartment in a triple-decker home, a duplex, or other multi-family house. The type of insurance coverage you’ll need depends on whether you’re living in the home, or whether you own the home and rent it out while you live elsewhere.
If you live in a multi-family home and you’re a full-time resident, you could go with the most common homeowner’s policy, which is the same as a policy for a single-family home. Often this is the best bargain, too.
The homeowner’s policy could cover a number of items, including the cost of rebuilding your home if it’s destroyed, personal property (better to go with “replacement cost” to reduce the effect of depreciation), and personal liability to protect you from lawsuits and other potential issues. If your home is damaged in some way, this policy could also cover the cost of renting another place while it is being repaired or rebuilt.
It won’t automatically cover some items, but you can always add them to your policy—things such as identity fraud and personal jewelry coverage.
If you own a multi-family home and rent out the units while you live somewhere else, you may want to go with a Dwelling & Fire Policy. This policy covers losses to the home’s structure, loss of use or rental coverage, and more. It’s more expensive than homeowner’s insurance because it must include more. It includes more because you, the owner, aren’t there to keep an eye on things. This increases the need for more protection.
It’s important to select an “all risk” policy rather than a “named peril” one. This is because “named peril” will only cover specifically named losses that are defined in the policy. You need to be careful, because some insurance companies will deny your claim if the loss doesn’t match perfectly to the defined “peril” as named in the policy. This can be a real headache should something unexpected happen.
“All risk” coverage is just as it sounds—covering all losses unless they are specifically excluded. Imagine there is a fire in your building. Everyone is okay, but the damage is so great that residents have to live somewhere else while it’s being repaired and/or rebuilt. You could lose a great deal of rental income during this time. “All risk” will protect you. It also expands the coverage for personal items, losses from theft or accidents. These are things that are out of your control, so you want to anticipate any possibility.
What isn’t covered in an “all risk” policy?
Even with “all risk” insurance, there are some exclusions. Insurance companies won’t usually cover losses that are caused by wear and tear over time. Also, unless you live in a place like California, you won’t typically be covered for earthquakes. Most importantly, if you live in a flood zone or area that could be easily flooded, you’ll need to get separate flood insurance. Don’t wait until a monster storm to worry about damage from flooding!
Other things not usually covered in “all risk” insurance—water and sewage backup and liability. You should seriously consider adding these to your coverage. Whether it’s a plumbing issue or major city sewer backup, these can create expensive repairs that will be your responsibility as the owner of the multi-family house.
If you don’t have liability protection, you could incur major costs from lawsuits. The more tenants you have, the more critical it is to get liability protection. If someone slips and falls on your property, or if someone else causes an accidental death, you could be found liable in these situations. Also, if your property features a pool, fitness center or playground, you’ll want to be covered should the unexpected occur.
Whether you live in a multi-family home or own one, it’s best to consult with professionals who will go over all of your options with you. That’s where Zawada Insurance Agency comes in. We’ll help you find the best deals on home, car and other types of insurance.
Please contact Zawada Insurance Agency for details.
Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.