Homeowners Insurance in New York

New York is a highly populated state with almost 20 million residents. Those renting or owning property need homeowners' or renters' insurance to protect their property from disaster. Located in the Mid-Atlantic, New York is subject to various types of weather disasters, such as hurricanes, fierce winter storms, and flooding. All of these can devastate property, causing enormous damage and costly claims. Since 1953, New York has had 95 federally declared disasters, and the rate of disasters per 1 million people is 4.88.

Along with claims from windstorm and winter storm damage, New York residents also file insurance claims for ice dam damage, basement flooding due to burst pipes or faulty plumbing, fallen tree damage, garage door damage due to vehicles, liability issues, theft, and vandalism.

Although New York does not require property owners to carry homeowners insurance, the state government strongly recommends it. If you borrow money to buy a home in New York state, your lender will require that you purchase homeowners insurance and keep specific limits on the house for the life of the loan.

The national average for homeowners insurance is $2,728 yearly or $227 monthly. New York property owners pay an average of $1,775 yearly for home insurance, which is more affordable than most states.

In New York, two types of insurance are available for homeowners: monoline and package insurance. Monoline insurance is only one type of insurance, such as liability. Package insurance combines various types of insurance, such as dwelling protection, liability, and personal belonging coverage. Package insurance is typically less expensive than buying each one separately. The available types to choose from consist of the following:

Some lenders may also require you to purchase an umbrella policy that covers anything the other coverages do not. This policy provides a safety net to ensure you can restore your property to its original state.

New York has a considerable coastline, meaning potential floods. Flood insurance is extra but recommended for anyone living in flood zones. Generally, insurance carriers do not provide insurance for flooding, earthquakes, or tornados. You can sometimes purchase special insurance to cover them, but only rare providers offer it. Even though hurricanes are rare, it is good to have them when your house is damaged due to rain, high winds, and other natural disasters.

FEMA (Federal Emergency Management Agency) manages the National Flood Insurance Program (NFIP) through a network of 50 providers across the U.S. Since most homeowners insurance does not cover floods, this supplemental coverage can repair damage and replace items after a flood. Depending on your options, it can cover the building and/or your personal belongings. This program is available to homeowners, renters, and businesses. Learn more about the program on FEMA's website.

Severe weather is becoming the norm across America. With more frequent natural disasters, insurance providers incur substantial losses, and some are even going out of business. Climate change is the number one reason for rate increases. Rates have spiked by 34% over the past five years and as high as 60% in some areas. Homeowners insurance rates in New York have increased by 19.0%, which is less than the national average, but it is still increasing.

New York does see its share of hurricanes and heavy winter storms. Some of New York includes coastline, which is subject to flooding. Although the Mid-Atlantic doesn't have a lot of earthquakes or tornados, those items are typically not covered under an insurance policy. A single claim for fire damage averages $77,340. Water and freezing damage costs insurers an average of $11,650, and wind and hail cost an average of $11,695. From 2015 to 2019, New York insurance providers lost a total of $2,428,999,000. New York makes the list of states with the most lightning damage claims for 2021 (2,426 claims costing $45,100,000). New York also has many homes at risk for hurricane damage. In 2021, New York also made the list for "most dog bites", with 900 claims costing an average of $68,203 per claim. From 1980 to 2024, New York had 90 billion-dollar disasters.

Home insurance costs are rising, and property owners are scrambling to find ways to save. The best approach is to fully understand the factors that impact your costs and adjust accordingly.

Some ways to save on homeowners insurance include:

• Avoid High Risk: To save money, remove anything on your property that poses extra risk.
• Raise Your Deductible: Increase your deductible as comfortably as possible to reduce your premiums.
• Improve Your Credit Score: Improve your credit to save money on your rates.
• Install a Security System: Install a high-end security system to make your home safer and earn lower rates.
• Make Home Improvements: Replace the roof and install storm windows and shutters for reduced insurance rates.
• Don't File Small Claims: Don't file for small claims; wait for the big ones. Even one claim could increase your rates by 20%.
• Ask for Discounts: Ask your provider for other discounts they offer that you might qualify for.
• Ask Around: Ask friends and family for recommendations for solid insurance firms that offer low rates.

The basic homeowners' insurance covers your dwelling. If an allowable peril damages or destroys your home, the insurance will pay for it to be restored or rebuilt. Dwelling coverage also pays for attached structures like a garage or porch. Dwelling coverage is usually specified as "Coverage A" on your policy. It also covers finish work like flooring, countertops, and appliances. It's the most essential coverage you can have. Some of the perils covered under dwelling coverage are:

• Fire and smoke damage.
• Storms.
• Lightning.
• Tornadoes.
• Explosions.
• Falling objects.
• Theft and vandalism.
• Motor vehicle and aircraft damage.
• Damage that is caused by the weight of snow or ice.
• Accidental discharge of water or steam.

Some policies list the allowable perils, and others use a broad spectrum to include all qualifying perils.

You can get a policy easily by finding a provider and contacting them through their website or calling their 800 number. You can also find a local agent to work with to help you decide on coverage limits. You must pay the first year in advance, and after that, you can pay annually or through your mortgage escrow if you have a loan.

Some standard homeowners insurance discounts offered by reputable firms include:

• Quote In Advance Discount: Get a quote well before you need it, and you might get a discount.
• Security Discount: Install a security system to avoid theft and vandalism, and your insurance provider will give you a discount.
• Fire-Safety Discount: Install fire safety equipment like sprinklers, smoke alarms, and fire extinguishers for a discount.
• New Home Discount: New homes cost less, and sometimes, you get a considerable discount.
• Green Discount: Install eco-friendly materials in your home for a discount.
• Senior Citizen Discount: Many firms give seniors or retirees a special discount when they reach a certain age.
• Loyalty Discount: If you stay with the same company year after year, they may offer you a discount as time passes.
• Bundle Discount: Bundle multiple policies and earn a discount on your rates.
• Military Discount: Most firms offer discounts on home insurance to members of the military or veterans.
• Occupational Discount: Some professions, like firefighters and teachers, earn discounts.
• Non-smoker Discount: Non-smokers offer less fire risk, and insurers discount them.
• Autopay Discount: Your carrier should offer discounts if you sign up for auto payments.
• Paperless Discount: Going paperless is good for the environment and your rates.

Common Rates Offer by Homeowners Insurance Firms

New homes cost far less to insure than older homes. Sometimes, you can pay up to 40% less, and homes five years old or younger can cost up to 26% less to insure. The average cost of home insurance for a new construction home in New York is $1,144, which is far less than that of older homes. Your actual price will vary based on your customer profile and the firm you use.

Top 10 Home Insurance Firms in New York and Average New Home Savings

Whenever you make home improvements, they can affect your coverage. If you do not update your policy to reflect the new value, if something happens, you might not get enough money to restore the home to its new current state. Some renovations increase the size and value of your home, while others increase risk, raising your rates. Others lower risk and your rates.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Adding a Fountain: A fountain can add an air of elegance to your property, but it is also a risk and will cost more to insure.
• Upgrading Your Bathroom: These days, the sky is the limit when it comes to bathroom upgrades. Luxury upgrades, though, will increase your home insurance rates.
• Building a Koi Pond: Koi ponds can be very serene, but they also pose a risk, and your rates will increase if you add one.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• New Roof: A new roof will help your home weather storms better. Decreasing your risk of claims makes your insurance company happy, and they will reduce your rates if you do.
• Upgraded Plumbing: Old plumbing can leak, causing water damage and even flooding. Upgrading your plumbing is good for your house and decreases your rates.
• Home Security or Smart Home: Installing home security or smart home features that monitor your home for intruders and other threats will also help lower your rates.

Voluntary upgrades are not covered under homeowners insurance. Home insurance pays only to rebuild or repair your house after a disaster like a hurricane. Other things not covered are anything outside your policy limits, such as pest infestations, animal damage, and rodents.

Always be sure to update your policy after any renovations. Have a carrier representative view the changes and reassess the value and premiums. Although your monthly cost may increase, you will have peace of mind that your home is protected.

During renovations, you may want to buy a temporary builder's risk policy, which protects your home and any partially completed sections during the renovation. It also covers materials that may get damaged before installation.

New York renters also need financial protection for their homes. Renters insurance doesn't include any dwelling coverage. The owner of property in New York state must cover that under their own policy. However, renters insurance does pay to replace your personal belongings if they are damaged or destroyed due to a covered peril. Renters insurance also includes liability protection, medical payments, and loss of use. Each policy has limits, and expensive items may not be covered.

Some covered perils in New York include:

Some of the items that renters insurance covers are:

Renters insurance is priced according to three main factors, and they are:

In New York, renters pay an average of $170/year or $14 monthly. That is lower than the national average of between $15 and $20 monthly.

Condo owners in New York also need homeowners insurance. Condo insurance works differently than homeowners. Condo developments have a master policy that covers the dwelling of each building. After a qualifying event (fire, windstorm, theft, vandalism), the master policy will pay to restore the building back to its original condition (when it was first built). Most condo owners have updated the interior (kitchen, baths, flooring, lights, appliances, etc.), and those items will not be covered. HO-6, or condo insurance, pays to restore the condo's interior back to its most recent condition with all the updates. Condo insurance also includes personal property coverage, liability, medical payments, loss of use, and loss assessment.

Unlike renters insurance, condo insurance does have dwelling coverage, but it only applies to the interior. Also, the liability portion only works if the person is hurt inside the condo, not outside or on common grounds.

Condo insurance will pay to replace the following items as well as others:

• Furniture
• Appliances
• Flooring
• Cabinets
• Countertops
• Wiring
• Plumbing
• Interior Walls
• Light Fixtures
• Personal Belongings

New York condo owners pay an average of $640 to $770 a year, which is slightly higher than the national average of $625 for $60,000 of personal property, $300,000 of liability, and a $1,000 deductible.

You can save on condo insurance by doing the following:

• Raise Your Deductible
• Improve Your Credit
• Stay Claims Free
• Shop Around for the Best Rates
• Bundle Policies
• Improve Home Security
• Install Fire Safety Devices
• Ask for Discounts
• Remain Loyal to the Same Provider
• Review Your Policy Every Year

The New York home insurance market is volatile, with premium prices rising steadily. Many providers operating in New York have tightened their underwriting restrictions, making it difficult for some homeowners to obtain insurance. However, on the flip side, the market is seeing higher-than-average payouts. Despite the severe weather trends, New York insurers have profited annually for the past decade.

New York has the potential for costly disasters like hurricanes, severe winter storms, and even flooding. Insurance carriers have been lucky up until now, but things may change if climate change continues to dictate more frequent natural disasters. Providers may have to limit coverage and cancel high-risk customers if that happens.

Regulation of the home insurance industry is left up to each state. New York has designated the New York State Department of Financial Services, located at 25 Beaver Street, New York, NY 10004, as the agency responsible for monitoring providers and rates, investigating customer complaints, and sanctioning guilty firms.