OUR MOST FREQUENTLY ASKED QUESTIONS
Most companies have a mandatory separate wind or hail
deductible (normally 2% of the building coverage) on
each policy. This deductible is applicable to any
loss due to windstorm or hail, including our frequent winter
Some companies offer a hurricane deductible. Only if the National Weather Service issues a hurricane watch or warning in Massachusetts will the hurricane deductible be applicable. Otherwise, any loss due to wind or hail is covered under the (usually lower) “all perils deductible” or the regular policy deductible.
A few companies offer a "buyback" or waiver of the wind or hurricane deductible, usually subject to very stringent underwriting requirements, like no nearby trees capable of falling onto the structure.
If you have been using the home yourself, then you probably have a homeowners policy which is generally issued to an owner occupant of a home. If you are planning to rent the home for a short time, your homeowners insurance company may allow this on your current homeowners policy. You may want to check with your agent to see if this is allowed and what policy provisions may change with a tenant in your home. If you are planning to rent the home for a long period of time, a dwelling fire policy is probably the appropriate policy. This policy differs slightly from the homeowners policy. The largest difference is that there is usually no coverage provided for theft. There is also no set amount of contents coverage provided by the policy, you set a limit yourself. The perils the dwelling policy provides coverage for may also be less broad than the homeowners policy it is replacing.
You can save money by increasing your policy deductible. Installing deadbolt locks, smoke alarms, and burglar and fire alarms that alert local police and fire stations may qualify you for additional discounts. Some insurers also offer discounts if you insure your home and automobile with the same company. You can also ask your agent to check current premiums with the other companies (s)he represents. Rates are not uniform, and change regularly.
A homeowners policy does not provide coverage if the water has seeped in or leaked through the foundation or through the building itself. There would also be no coverage provided by the homeowners policy if a body of water such as a lake or ocean flooded and caused damage. Flood Insurance can be purchased through the National Flood Insurance Program, but even this coverage only takes effect when 2 acres surrounding your home are flooded.
If you have a tree that falls due to a windstorm and hits your home causing damage, your homeowners policy will pay a limited amount for the removal of the debris as well as for the repair of the structure, subject to your policy's wind deductible. If your tree hits your neighbor's home, fence or other property, causing damage, your neighbor's homeowners policy will most likely pay for the removal of the tree, as well as the damage to their property, subject to their policy deductible. You are not legally responsible for damage caused by an act of God, such as wind. Therefore, the liability section of the policy does not apply, because there is no liability. If the tree falls into your yard or the neighbor's yard but does not damage any covered structure, neither policy will pay for the removal of the tree debris. Most insurance companies offer a special endorsement that can be added for an additional premium that provides debris removal coverage even if the tree has not damaged a covered structure.
Homeowners policies are package policies including coverage for your dwelling, other structures, personal property, loss of use, and liability coverage. The coverage provided under other structures is usually 10% of the coverage that you have on your dwelling. There is no specific charge for this coverage and there is no savings to delete this coverage. This section does provide coverage for items such as lamp posts, mail boxes, tool sheds, swimming pools, etc. subject to the policy deductible. A few companies have a special endorsement which can increase the dwelling coverage 10% if there are no other structures.
Your homeowners policy provides coverage if you were to be found
legally liable by a court of law for bodily injury to a contractor
or his employee. It covers bodily injury to others when workers
compensation coverage is not required by law. The Massachusetts
workers compensation law specifies that an owner occupant of a 1
to 3 family dwelling is not required to purchase workers
compensation coverage when having work done on the premises.
However, we strongly recommend you obtain a Certificate of Insurance from the contractor which provides evidence of their own workers compensation and liability insurance for their acts and acts of their employees. There are several reasons for this recommendation.
If the contractor himself or his employee were injured, there would not necessarily be coverage for his injuries or lost wages. You would have to be legally responsible for his accident. You are covered by the policy, not the contractor. In our litigious society, you may find yourself in the middle of a lawsuit that could be both lengthy and upsetting, regardless of your actions or responsibility. If the contractor had workers compensation, its coverage would be primary and may very well preclude further action.
On the other hand, the contractor could damage your property. If the damage done was covered by your homeowners policy, you would be responsible for paying your policy deductible. If the contractor had liability coverage in force, it would be the primary coverage. Reaccomplishment of faulty workmanship would not be covered by either policy.
Higher liability limits are available or an umbrella liability policy may be purchased which would provide coverage up to one million dollars above the underlying homeowners liability coverage or automobile liability coverage.
In Massachusetts, if you have a personal automobile policy, anyone who is not a customary operator may drive your vehicle occasionally without being listed as an operator on your policy. Household members are required to be listed as operators because they are most likely to have regular use of the vehicle. If an unlisted household member is operating your vehicle and has an accident, the insurance company may withhold payment for some coverages, like collision, if additional premium would have been owed had they been listed, due to an inexperienced operator class or a higher rating step under the Safe Driver Insurance Plan. This same rule applies to anyone who has been given regularly furnished use of your automobile even if they are not a household member. When operators of your vehicle have an auto policy of their own, in MA, they can be "deferred" operators, which means there will not be an additional charge on your policy regardless of their driving class or history.
There are basically two ways in Massachusetts to cancel an auto policy. The first is to return the license plate to the MA Registry of Motor Vehicles. They will issue you two copies of a plate return receipt. You keep one copy for your records, in case the town continues to bill you for the exise tax, the second goes to your insurance agent, who will forward it to the insurance company to cancel the policy. If you stop making payments on your insurance policy, it will eventually cancel for non-payment, but this is not advisable. The insurance company will notify the MA Registry that the plates are no longer valid. If you apply for an auto policy in Massachusetts within a year from the date of the cancellation for non-payment, you may be required to pay the annual premium in full.
Even though there is now "managed competition" in Massachusetts, most companies use a Safe Driver Insurance Plan (SDIP) based on the Massachusetts SDIP which became effective on January 1, 2006. It is based on the points assessed for at-fault accidents and conviction of certain traffic violations, as opposed to the old step-based system.
Under the SDIP, accidents and convictions of traffic violations are tracked by the Registry of Motor Vehicles and used by insurance companies to determine a surcharge or discount factors to be applied to the policy premium when a policy is initially written and at each policy renewal. In addition to adopting the SDIP, the state adjusted the entry-level insurance rates for all drivers to rates that assume 0 at fault accidents or convictions of traffic violations (one non-criminal driving violation is assigned 0 points).
The SDIP features a range of surcharges from 0 to 45 points. Experienced drivers (those with six or more years of driving experienced) are charged per point for accidents and moving violations. Inexperienced drivers are charged less per point for accidents and moving violations. The reduced surcharges for inexperienced drivers recognizes that they already pay a higher rate based on the assumption that, as new drivers, they are more likely to have accidents or violations.
The point values assigned to at-fault accidents and conviction of moving violations are:
Major Moving Violation 5 points
Major Accident 4 points
A claim payment of more than $2,000, exclusive of any deductible, under Collision, Property Damage Liability or Bodily Injury
Minor Accident 3 points
A claims payment of more than $500, exclusive of any deductible, under Collision, Property Damage Liability or Bodily Injury
Minor Moving Violation* 2 points
*If the first incident on a driver's record is a minor moving violation, no points are assessed for that violation; however, it will not be counted as an incident-free year.
The SDIP offers two excellent driver awards:
A driver with no accidents or violations in the six years preceding the effective date of the policy will earn the Excellent Driver Discount Plus (SDIP code 99) which provides a discount from the published rates for Part 1 Bodily Injury Liability, Part 2 Personal Injury Protection, Part 4 Damage to Someone Else's Property and Part 7 Collision.
A driver with no accidents or violations in the five years preceding the effective date of the policy will earn the Excellent Driver Discount (SDIP code 98) which provides a discount from the published rates for Part 1 Bodily Injury Liability, Part 2 Personal Injury Protection, Part 4 Damage to Someone Else's Property and Part 7 Collision. In addition, an experienced operator (six or more years) with exactly one incident in the past five years which is a noncriminal traffic violation and is more than three years old will be awarded the Excellent Driver Discount.
As an incentive to drive safely, the SDIP allows the aging of incidents. When a driver has three or fewer accidents or violations in the past five years, and the most recent accident or violation is more than three years old, the number of points for each accident or violation will be reduced by one. Accidents or violations may only be aged once.
This summary courtesy of the Massachusetts Association of Insurance Agents.
Your MA auto policy will provide the same coverage for your rental private passenger auto as it does for your own vehicle. This does not mean that your policy provides adequate coverage for the rental, though. Your policy does not provide coverage if the rental vehicle is damaged and cannot be used. The rental company is losing income for the time the vehicle is not able to be rented. The rental company, as part of their contract, may require you to be responsible for this lost income. Your policy does not provide this coverage. Another provision of your policy is that it will repair or replace an automobile at actual cash value, not replacement cost. Actual cash value takes into account depreciation for the age of the vehicle, while replacement cost is the amount it would cost to purchase the vehicle today. The rental contract may require you to be responsible for replacing or fixing the vehicle at the full retail value. Some major credit cards offer rental car coverage when you pay for the rental with their card. You may find the coverage offered by the credit card company to be in compliance with the rental car contract. The rental company will offer their insurance to you for a nominal fee. This insurance should provide for the potential coverage issues at question. The best way to cover yourself is to purchase whatever insurance the rental company offers.
You may have a grace period of 7 days to transfer the license
plate subject to certain conditions. You must be at least 18
years old, the previously owned vehicle must be of the same type
and have the same number of wheels as the new vehicle, and
you need to have lost possession of the old vehicle
in order to be eligible for any grace period. The license plates
must be attached to the newly acquired vehicle and the operator
must carry an original copy of the bill of sale indicating the
plate number to be transferred or a certificate of transfer
issued by the dealer. See also this faq from the MA
Such risks range from vacant buildings and personal liability to oil rigs and major sporting events.
When it is necessary to obtain this kind of insurance, we turn to specialty brokers who obtain coverage from a "surplus lines" company. This means that the company is licensed out of state, or "nonadmitted." They are not licensed in Massachusetts, but are approved by the Division of Insurance to do business in the state. The insurance company does not participate in any of the insurance guaranty funds created by state law should the company become insolvent and be unable to honor claim payments. Safeguards such as the Massachusetts Insolvency fund (pays claims of insolvent insurance companies up to $300,000), do not apply to nonadmitted companies. Therefore, it is important that the insurance company has a high financial strength rating, as determined by A.M. Best, the leading independent insurance company rating agency. Financial strength ratings measure the ability to pay claims. We place business only with companies with "A" ratings.
The best known surplus lines company is Lloyd's of London, the world's leading specialist insurance market. Their underwriters are known for drawing up tailored, creative solutions to complex problems, enabling businesses all over the world to find insurance to meet their clients' needs. Lloyd's has an A.M. Best rating of "A".