Insurance
In this chapter, you’ll find information on different types of insurance, including homeowners, auto and medical, as well as practical tips on reading policies and shopping for coverage. As you organize your relocation to the New York City (NYC) area, it’s also a good idea to review your family’s insurance needs. For your home, you’re probably planning to purchase new home furnishings, appliances and other equipment that should be noted in your updated home inventory. If you’ll be commuting to and from the office each day, you’ll need to know how many miles you’ll be driving. Keep handy copies of previous auto, home and health policies for easy reference when completing new insurance applications—it will save you time and aggravation.

INSURANCE IN NEW YORK
In New York, the state’s insurance regulator is the New York State Insurance Department, soon be known as the New York State Department of Financial Services. At its website (www.ins.state.ny.us), you’ll find a wealth of consumer information and names of licensed insurance providers that are allowed to market their services in the state. The department’s New York City Consumer Services office provides residents with a local place to call for answers to general insurance questions or for information on filing an insurance-related complaint. Call the NYC Consumer Services line directly, Monday through Friday at (212) 480-6400.

QUICK TIPS TO HELP YOU SELECT INSURANCE COVERAGE
Following are tips to assist you with all of your insurance shopping needs:
  • Get price quotes from several companies. Compare the rates and coverages. The New York State Insurance Department (NYSID) publishes auto and homeowners price comparisons that can help you compare sample rates. The price comparisons include annual price estimates for sample policies and information about a company’s complaint record and financial strength.
  • Include independent agents. Some agents only represent a single company or company group. Independent agents typically represent several companies and can give you multiple quotes at one time.
  • Determine what coverages you want and need. For instance, if you have valuable car stereo equipment or if you need more than basic residential coverage for jewelry, collections or other valuables, you may need endorsements that change or add coverage. Endorsements that add coverage will raise your premium.
  • Answer questions truthfully. When you apply for insurance or ask for a rate quote, wrong information may result in an incorrect price quote, rejection of your insurance application or cancellation of your policy.
  • Consider higher deductibles. Your policy probably will have deductibles, which are amounts you have to pay out of pocket on your claim before the insurance company pays. The higher your deductibles, the lower your premium. Choose the highest deductibles you can afford.
  • Ask about discounts. Insurance companies may offer policy discounts that will lower your premium. Ask your agent what discounts the company offers.
  • Make sure you have uninterrupted coverage. Never cancel an existing policy until you get your new policy or a written “binder.” A binder proves you have coverage until the company issues your policy.
  • Don’t pay cash to an individual agent. Pay with a personal check or money order made out to the insurance company or agency. Get a receipt for your premium payment.
  • If a company turns you down, keep shopping. Different companies have different criteria for accepting customers.

HOMEOWNERS INSURANCE
When relocating to the NYC region, one thing you don’t want to delay on is purchasing homeowners insurance for your new home. The insurance covers both damage to property and liability or legal responsibility for any injuries and property damage you or your families cause to other people. Homeowners insurance not only protects your assets, it’s also usually a requirement for securing a mortgage. The risk to lender of an uninsured home is too great; therefore, many may not lend to you or may require you to pay a higher premium until you acquire homeowners insurance.

Make Sure Your Coverage Fits Your Needs
Insurance companies sell several types of homeowners policies in New York, each with a different level of coverage. Policies are issued on either a monoline basis or as a package policy. Monoline policies contain only one type of coverage, such as liability insurance, while a package policy includes several different types of coverage, such as property, liability, theft and medical. A package policy is generally less expensive than insurance coverages purchased separately.

According to the NYSID, standard types of coverage offer protection against the financial loss you might suffer to your home or belongings if any of the following events occur:
  • Natural Disasters: This includes damage from fire, windstorms, hail and explosions (except for steam boilers).
  • Inflicted Damages: Causes for this can be riots, civil commotions, aircraft, vehicles, smoke, vandalism and malicious mischief.
  • Theft: This covers theft of your personal property.
  • Liability: This covers you if someone gets injured on your property due to your negligence or that of a member of your family. It also covers somebody else’s property that is damaged as a result of your negligence.

New York insurers offer five different types of policies that provide coverage for owners who occupy one- or two-family houses. A sixth type is also available to cover tenants of a house, apartment building or co-op owners.
  1. The Homeowners-1 (HO-1): This policy, also known as a “Basic Policy,” insures your home and only the types of damage specifically listed in the policy. Very few insurers sell this type of insurance; most offer more comprehensive policies.
  2. The Homeowners-2 (HO-2): This policy, also known as a “Broad Form Policy,” insures your home and contents against the perils listed in the HO-1 policy along with other additional listed perils, such as falling objects; weight of ice, snow and sleet; and damage resulting from an accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire sprinkler systems.
  3. The Homeowners-3 (HO-3): This policy, also known as a “Special Form Policy,” is the homeowners policy most widely used by insurers. To many, it is considered the standard homeowners policy form, and many lending institutions recommend buying it. This policy covers your home for all risks of physical loss except those that are specifically excluded, such as flood, earthquake, war or nuclear accident. Check your policy for a complete listing of the excluded perils.
  4. The Homeowners-4 (HO-4): This policy, also known as “Contents Broad Form” or “Tenants Policy,” insures against damage to the contents of an apartment, co-op or condominium unit as well as for personal liability of the insured when people are injured or sustain property damage arising from the insured unit.
  5. The Homeowners-5 (HO-5): This policy, also known as a “Comprehensive Form Policy,” protects your home against the same perils as the HO-3 policy, plus your personal possessions also are covered for all risks of physical loss, except those risks that are specifically excluded. This extra protection also may be provided by purchasing a HO-3 policy with a “Special Personal Property” endorsement.
  6. The Homeowners-6 (HO-6): This policy, also known as a “Unit Owners Policy,” provides property coverage for any alterations, appliances, fixtures and improvements within an insured unit, but condominium and co-op buildings and their common areas should be insured through policies issued to the co-op owners and the condominium owners associations. It is not necessary for a tenant to insure the building in which he or she lives since that is the owner’s responsibility.

The NYSID advises the purchase of enough coverage to avoid a major financial loss if your home is badly damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house. Also, it means that you should insure your home’s “replacement cost,” not its market value. The market value may be higher or lower than the cost to rebuild your home depending on the real estate market. If you have replacement-cost coverage and your house is destroyed, you can rebuild your home on the same lot at current local construction costs.

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