Hi! I've been inspired by the
recent post on optimization to try to reduce our home insurance bill. We bought a co-op a year or so ago -- if you aren't familiar, a co-op is basically a condo with a slightly different legal structure -- and when we bought it, the board said "Get insurance. Ask for co-op insurance. It'll cost you a few bucks." And because closing was stressful, we did what they told us, and we ended up getting a policy for $875/year. It's expiring soon and I've been shopping around but it's very confusing to try to compare policies. I'm not very comfortable with insurance and I have a lot of questions.
The facts: The co-op itself we bought for $400k in NYC. The building has a "master insurance policy" and is responsible for the exterior walls as well as damage done by other co-ops (flooding being the main instance). The apartment has all our stuff in it -- the usual kitchen appliances, carpets, ACs, five laptops, a NAS, a projector, some amount of ordinary furniture, clothing, and a bunch of odds and ends. We don't have expensive jewelry or precious artwork. Probably electronics are the most expensive things we own, followed by the appliances. My goal in purchasing insurance is to cover catastrophic risk -- I'm comfortable with some risk and a high deductible. We have a mortgage but the bank does not have specific requirements about coverage, and neither does the board (what they told us was just "friendly advice").
The original policy we got insured: $150k of "dwelling", $50k of personal property, $20k of loss of use, $1m of personal liability, and $5k of medical payments. It had a relatively low deductible ($500).
I looked online for co-op insurance and there aren't many companies that market it like that. But the original policy is marked "HO-6", which is the same as condo insurance, so I've been shopping for condo insurance and hoping it's the same thing.
The questions:
1. Is co-op and condo insurance, in fact, the same thing?
2. Two different agents gave us quotes from Travelers. One was marked "Form HA-6" and one was marked "Form HA-9". Are these the same thing? I can't find anything about what "HA" means, it keeps getting autocorrected to "HO-6".
3. The quotes from Travelers don't seem to correspond to what the old policy had. Instead of "dwelling", one quote says "Increased Coverage A", and the other one says "Unit Owners - All Risk". Is this normal? Does each company/agent/quote use different mechanisms to provide insurance?
4. Where did this $150k of dwelling come from? Since we spent $400k, shouldn't that be the amount we insure? Is it less because the building is covered by a separate policy? How much less should it be? It feels like companies have limits on the amount of "dwelling" coverage they'll offer -- Geico's web interface only goes up to $200k for instance.
5. How do we figure out how much personal property we should cover? The $50k number may have come out of nowhere -- I don't think we spent $50k on all the stuff in the place -- but some policies cover "replacement cost" and some don't. If I bought a $2k laptop 4 years ago and I don't have "replacement cost", then I'd only get "fair market value" if something happened to it -- does that mean I should estimate the "fair market value" of our stuff?
6. Finally, what "feels reasonable" here? Quotes seem to vary by $200, which is almost 20%. Is there really that much margin in the insurance business or does that indicate that I'm buying worse coverage? Is "a few bucks" (per month?) really possible?
So far the best policy we've seen is with State Farm. It doesn't have a replacement cost option or a "water backup" coverage, but it was $615.
I don't mind spending an hour or two to save $200, but I've spent several hours just trying to get my head around this, so any help is appreciated!!
