Cuddigan Insurance


Purchasing a home for the first time can be extremely overwhelming.  There are so many  considerations, for example finding the right mortgage lender, interest rates, loan amount, space requirements, home inspections and homeowners insurance to list a few.

This article is meant to help first time buyers consider some common items that may have an effect on your homeowners insurance:

Is your home in a flood zone?  If so, this could substantially increase insurance costs.

Do you own a dog?  If so, some insurance companies may deny you home owner’s insurance coverage or increase your premium due to the breed of the dog or what is referred to as “high-risk” breeds, including but not limited to Pit Bull, Rottweiler, Doberman, German Shepherd, etc. For more information regarding “high-risk” breeds contact your insurance agency.

Do you own a trampoline?  If so, this could increase insurance costs.

Cost of Homeowners Insurance:

The cost of homeowners insurance is based on the cost to rebuild the residence from the ground up. The market value of the home does not play a role in determining the cost to rebuild.  

For example, you could buy a 750 square ft. home on Beacon Hill in Boston and have paid $1 million for it because of the land. However the insurance value might only be $ 150K because it is only 750 square feet or the cost to rebuild (i.e. land doesn’t burn).

Generally the insurance value is estimated using a cost to rebuild figure that uses a dollar amount multiplied by the square footage to calculate the rebuild cost of a home. Factors such as quality of materials can greatly influence that dollar amount both up and down.

 As you can see there are many variables that go into determining the cost of homeowners insurance. The best advice is to contact your agent as early as possible in the home buying process so they can give you an estimate as to what the expected cost may be.
Posted 7:10 PM

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