Homeowner's insurance for less

By Kimberly Blanton

After years of rising rates, consumers are seeing the tide turn

After years of unrelenting increases in homeowner's insurance costs, consumers are ready for relief.

more stories like thisIt used to be that auto insurance was far more costly than homeowner's coverage in Massachusetts. But years of regulation have kept auto insurance prices in check. Meantime, homeowner policies have gone through the roof: Premiums rose 9.2 percent last year, on average, and are up 80 percent since 2000, according to the Massachusetts Division of Insurance and the Center for Insurance Research in Cambridge.

"Now it's your homeowner's that is $1,500 and auto is $500. It's changed the dynamic," said Glenn Montgomery, owner of Brownstone Insurance Agency in Boston.

Oddly, it is deregulation of the auto insurance market in Massachusetts that is bringing long-needed relief to homeowners. Insurers now competing for auto coverage are trying to attract new customers by offering breaks on homeowner's insurance for customers who agree to bundle the auto and homeowner's policies under one company.

For homeowners willing to do so, some companies are offering substantial discounts of up to 20 percent off the home policy. However, there may be trade-offs in terms of coverage as a result of being bound to a single insurer.

That means consumers need to be vigilant on a number of fronts. Agents advised customers to always shop around and get multiple quotes, three or even four if possible. And get them from more than one agent.

Massachusetts' property-casualty insurance system is unusual for its heavy reliance on agents, who each represent a fixed number of insurers. Consumers may often maintain a relationship with an agent for decades, but those who shop with a single agent effectively limit the number of insurers bidding for their business.

There are different types of homeowner's policies, from bare-bones coverage that pays for only certain listed damages, to mid-level policies that suit most homeowners. There are higher level policies that provide more extensive coverage and cost more.

Carefully compare the quotes you receive. Richard Powers of C.A. Powers & Sons Insurance in Boston said policyholders should ask agents for the backup documents that spell out the coverage. "Put them side by side to compare. You shouldn't depend on a phoned number of $500," he said.

Compare the types of damages to your home that each policy would cover, and what they exclude from coverage, especially if you live in a coastal area and may be subject to storm damages. See how much the company will provide to cover your living expenses while the house is being repaired. Make sure the personal liability and medical coverages are comparable from policy to policy.

If you're shopping for a home and curious what it would cost to insure, you can find out if the property has had any history of problems or claims that may result in higher premi ums. Choice Point maintains a database of claims called Clue, or Comprehensive Loss Underwriting Exchange, and buyers worried about a property might want to request the seller provide such a report before closing.Continued...