Homeowners Insurance in Connecticut

Although owning your own home is a very rewarding experience, the process of buying a house and all of the necessary elements that go with it can be extremely stressful and difficult. One of those stressful and difficult elements is purchasing homeowners insurance. However, having a homeowners insurance policy will give you peace of mind knowing that your investment is protected.

In the state of Connecticut, Many homeowners insurance companies closely model their policies after the HO-3 policy. It provides financial protection against damage or destruction to the structure of your house, the contents of your home, and many other factors.  Unfortunately, there’s certain disasters which homeowners insurance usually does not protect. You will have to ask your agent about these and how you can protect your home.

Typical coverage limits for an HO-3 policy in Connecticut are listed in the table above. Of course, the numbers in the table above are modeled after a modest $200,000 home. If your home is more expensive, requires extra protection for additional structures, or is located in an area where certain uncovered natural disasters may cause damage to your property, you might need to purchase higher and coverage limits or ask your insurance agent about adding specific endorsements to your policy.

Obviously, cities with higher property values tend to have higher insurance rates overall. But keep in mind that these are estimates for average quotes across the region as a hole. In a city like  Bridgeport, for example, your required premium payment could be as low as $601 from from one company, or as high as $1,307 from another homeowners insurance company right down the street. That’s over $700 difference between companies for insuring property located in the same zip code.  this is why it’s so important for homeowners to do their homework and shop around for a If you do it right, you could end up saving tens of thousands of dollars and insurance premiums over the life of your mortgage.

Laws and Requirements

Just like in many other states, you don’t have to buy homeowners insurance in order to own a home – at least not according to state or federal law. However, the bank who is lending you the money to purchase your home will likely require you to purchase homeowners insurance also. This is because until you finish paying off your mortgage, the house still technically belongs to the bank. And they have a vested interest in protecting that investment from Financial ruin.

Taking a Home Inventory

Taking a thorough home Inventory before you start shopping around for quotes can protect you in two different ways. For starters, I can help you get the most comprehensive coverage for the best possible rate. If you don’t take an inventory, you can only guess how much coverage you need in order to protect your home and property. If you guess wrong, you could end up with too little coverage which will give you a bigger financial burden if something bad happens, or you could buy too much coverage and end up wasting money and yearly premiums. Secondly, when you need to file a claim on damage to your structure or personal belongings, if you don’t have a home Inventory, your insurance company may not pay a sufficient amount of money to replace or repair what was damaged. And in the worst case scenario, they may not pay out on the claim at all.

Choosing What (and How Much) Coverage

The basic homeowners insurance policy that many Connecticut insurance companies offer generally only covers common, basic disasters that aren’t too expensive to fix. On top of your basic policy, there are many other factors to consider. Such as:

• Fires – In the northern wintery latitudes of Connecticut, damage from fire usually isn’t that big of a problem.  Some areas of the state, however, may still be vulnerable to fire damage. If this is a concern for you, and it is not covered on your basic policy, and you should talk to your insurance agent about adding a fire protection endorsement to your policy.
• Floods – Flood and water damage, on the other hand, is much more likely to cause property damage for Connecticut homeowners. whether you are worried about damage from hurricanes or other severe weather, or you are concerned about damage from sewage backup or other plumbing problems, you will have to talk to your insurance agent about endorsements that can financially protect you from these disasters. You may also need to contact the NFIP, which is a government agency that specializes in protecting homeowners with affordable flood insurance.
• Damage from Winter Storms – The weather in Connecticut is very cold for most of the year. Additionally,  water damage from melting snow, burst pipes, and other winter related disasters might not be fully covered on your homeowners insurance policy because these problems are so common in your area. Again, it is a good idea to talk to your insurance agent about possible endorsements on your policy which cover these types of damages.
• Covering Your Property –  Your homeowners insurance policy doesn’t just cover the structure of your house, it also covers your personal belongings which are regularly kept Inside. This type of coverage is a basic addition to every homeowners insurance policy. And how much coverage you decide to purchase will depend largely on your home Inventory.
• Liability Coverage –  If someone gets hurt while spending time on your property, or someone else’s property is damaged in or near your home, there’s a chance you may be held financially liable for that damage. Liability coverage, on the other hand, can help protect you financially from having to make a large payout.
• Umbrella Coverage – As we stated all of the numbers we’ve been working with so far have been estimated based on the cost of a fairly modest home. If you live in a very nice home, if you have a lot of property to insure, or if you simply feel like your home is worth more than the estimates we presented here, you might need to think about purchasing umbrella coverage. Some insurance companies will only let you purchase so much coverage; and if you need more than that, then you will have to purchase a separate umbrella policy.

Replacement Cost vs. Actual Cash Value

Some policies, when your insurance agency pay that your claim, will determine the funds you receive based on either the replacement cost or the actual cash value of the property that has been damaged or destroyed. If your insurance company honors the replacement cost of your claim, that means they will pay out the full amount required to replace or repair your property as if it were brand new. The actual cash value payout, however, will likely be smaller due to the fact that this type of classification takes depreciation into account. So the older your property is, the less money you are insurance company will pay out based on an actual cash value claim.

How Your Credit Score May Influence Your Rate

Did you know that, like many other types of insurance, your homeowners insurance provider will take your credit history into account before calculating your premium? It’s true, unfortunately. Luckily, however, they only take your past 7 years of credit history into account as it relates to other forms of insurance. They do not perform a hard credit check, which could leave a blemish on your credit history that lowers your overall credit score.

Instead, they look at what’s called a clue report. This report includes the credit history we mentioned in the previous paragraph, but the credit rating agencies that evaluate your credit score will not be privy to this information. So you can shop around and get as many quotes as you want feeling secure in the knowledge that it will not adversely affect your credit score in the future.

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

Connecticut Insurance Department

The Official Connecticut State Government Website

Homeowners Resources for Connecticut Residents

Or contact them directly through the following resources:

Connecticut Department of Regulatory Agencies
Division of Real Estate
PO Box 816
Hartford, CT 06142-0816
Phone: 860-297-3800
insurance@ct.gov