How much does home insurance cost in Massachusetts?
When you buy a home there are a number of costs associated with the closing. You will most likely need to provide a down payment to the bank, hire a home inspector, and pay the dreaded CLOSING COSTS.
Closing costs include loan origination fees, taxes, charges for credit reports, discount points you pay upfront to bring down the interest rate, and document preparation and filing fees.
One cost that is often overlooked by home buyers is homeowners insurance.
More often than not, the lender will require you to pay the first year’s policy premium in full. When an insurance premium is escrowed, the lender collects funds as part of your monthly mortgage payment to put in an account to pay the insurance and property taxes.
The money paid as part of your mortgage payment is set aside to pay next year’s homeowners premium. By the time the next insurance payment is due, the escrow account has accumulated enough money to pay the policy in full.
When there is a mortgage on your home, the lender will require you to carry homeowners insurance to protect the property.
For most people, their home is their largest asset. A homeowners insurance policy will protect this investment from a potentially crippling loss. If there is damage to the home, the homeowners insurance carrier will provide you with the funds to repair the damage done to the home. Homeowners insurance claims would be subject to the policy deductible and the coverage forms.
So, what does home insurance cost?!?
According to valuepenguin.com, the average homeowners policy in Massachusetts costs just over $1300 a year.
The cost of homeowners insurance will vary depending on the replacement cost of your home and the optional endorsements selected. In the broadest of terms, the cost can be estimated to be about $35 for every $100,000 in replacement cost on a monthly basis.
Let’s look at an example:
If it would cost $300,000 to rebuild your home, the insurance company will use this as the basis for your coverage. The replacement cost of your home is not tied to its market value.
$35 x 3 = $105/month
This calculates out to be $1260 for the year.
The replacement cost of your home will play a large role in determining the cost of the coverage.
Looking for an insurance action plan for your new home on the south shore? Want to know what your home insurance cost would be? WE CAN HELP.
Closing on a loan for a new home can involve an entire trees worth of paperwork.
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