Homeowners Insurance in Vermont

Vermont offers mountainous regions for great skiing, the best maple syrup anywhere, and is the birthplace of Ben & Jerry's ice cream. Located at the top of the Northeast, Vermont is prone to violent hurricanes and heavy winter storms. The entire Northeast is subject to massive snowstorms, which can cause devastating property damage. Vermont is considered a relatively low-risk state and one of the most prepared in terms of dealing with natural disasters. Since 1953, Vermont has had 45 federally declared disasters, and the number of disasters per 1 million people is 69.46.

Violent storms are not the only cause of homeowners insurance claims in Vermont. Residents also file other types of property claims for burst pipes, water damage due to faulty plumbing, ice dams, fire, theft, vandalism, and liability issues.

Vermont does not require homeowners to carry any type of insurance on their property. However, insurance agents and experts agree that anyone owning property should have at least some coverage. Anyone who takes out a mortgage must have insurance to protect the bank's interest. The lender will also dictate the amounts of coverage needed for the life of the loan.

The average homeowners insurance premiums in America is currently $2,728 a year or $227 a month. Vermont homeowners pay an average of $978, which is very affordable and considerably lower than the national average.

Homeowners insurance companies in America choose where to offer coverage and what types based on the possible perils in the area. Vermont is a low-risk state, and plenty of insurance carriers provide coverage there. The available types of home insurance in Vermont include:

Vermont does have heavy winter storms and hurricanes with torrential rains, and you might want to consider a flood policy and an umbrella policy to cover the gaps left by others.

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.

Global warming has hit insurance companies hard, and more than anything else, climate change has impacted rates across the nation. Over the past five years, rates have spiked by 34% in most areas and as high as 60% in some high-risk areas. In Vermont, homeowners insurance rates have increased by only 5.8%, making residents very lucky.

Vermont's main property damage issues come from hurricanes and severe winter storms. One fire or lightning claim costs insurers an average of $77,340. One water or freezing damage claim costs $11,650, and wind and hail damage costs an average of $11,695. From 2015 to 2019, insurers lost a total of $85,591,000 in Vermont. Wildfires occur in Vermont from April to September, with .98% of tree cover loss resulting from a fire caused by someone smoking.

Even with affordable homeowners insurance in Vermont, property owners still want to save. Doing so starts with learning how key factors impact your home insurance rates and making changes from there. The things that affect Vermont homeowners insurance include:

Some tips for saving on homeowners insurance include:

• Ask for Recommendations/Shop Around: Ask for provider recommendations and shop around. Get multiple quotes before deciding.
• Raise Your Deductible: Raise your deductible as high as possible to save on home insurance.
• Make Your Home Safer: Install home security and replace your roof, windows, or siding to strengthen your home and pay lower insurance.
• Fire Safety Upgrades: Install smoke alarms, fire extinguishers, and sprinklers to get a break on your home insurance rates.
• Don't File Small Claims: Don't file small claims. Wait until you need the insurance to use it.
• Bundle Policies: Bundle multiple policies together, and your insurer should cut you a better deal.
• Ask for Discounts: Ask your insurance agent for any discounts that might apply to you.
• Improve Your Credit: Ask your agent to re-evaluate and lower your rates accordingly.
• Avoid High Risks: Don't add new risks to the property and eliminate existing ones.

Homeowners insurance protects your home against covered perils. Whenever a disaster strikes and your home is damaged or destroyed, your home insurance provider will pay to rebuild or repair your home, restoring it to its previous condition. Some covered events are fires, windstorms/hurricanes, theft, vandalism, and liability issues. Most policies include dwelling coverage to protect the structure of your home. They also contain liability coverage, medical payments, personal property, other structures, and loss of use (ALE) coverage.

To get a policy quickly, find a provider online and apply through their website. You can also call their 800 number or find a local agent to work with you and help determine the right coverage for your situation. Once you decide, you must pay the first year in advance. Then, after that, you can pay monthly through your mortgage escrow or once a year if you don't have a mortgage.

The most common discounts you will see with reputable providers include:

• New Home Discount: Newer homes earn up to 40% off home insurance.
• Senior Discount: People of a certain age often get discounts from their insurance providers.
• Military Discount: Most firms offer discounts for active military personnel and veterans.
• Occupational Discount: Some occupations, like teachers, firefighters, and government workers, earn insurance discounts.
• Bundling Discount: Most firms will discount your premiums when you bundle multiple policies together.
• Claims-Free Discount: Stay claims-free as long as possible and earn ongoing discounts through your insurance carrier.
• Loyalty Discount: Remain a loyal customer; your insurance provider may discount your rates more each year.
• Quote in Advance Discount: Get a quote long before you need it, and you can earn a discount.
• Paperless Discount: Go paperless for statements, and you will get a small discount.
• Autopay Discount: Many firms offer small discounts for people who sign up for autopayments.
• Fire Safety Discount: Install fire safety features in your home, such as smoke alarms, sprinklers, and fire extinguishers, to lower your fire risk and earn discounts.

Common Rates Offer by Homeowners Insurance Firms

New construction homes cost far less to insure than older homes. Sometimes, you can pay as much as 40% less for a new home and 26% less for a five-year-old or younger home. In Vermont, you will pay an average of $628 for home insurance on a new construction home. Your actual rate will vary based on many factors, including your provider, age, credit score, claims history, etc.

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

Upgrades to your home can refresh and renew, making the old seem brand new, but these updates can also impact your home insurance rates. Some renovations actually add value and more space but will increase your rates. Some add risk and increase your rates, while others decrease risk and your rates. Others may have no impact because they add value but also reduce risk.

Home Renovations that Increase Rates

Some home renovations that increase your rates include:

• Adding a Home Office: Working from home intensely improves your work-life balance and increases your home insurance rates.
• Building a Tree House: Treehouses give the kids hours of fun, but insurers say they are an attractive nuisance, and you will get hit with higher rates because of it.
• Metal Roof: Metal roofs can be more robust in the event of a storm, but they are expensive to replace, and your rates will increase if you add one.

Home Renovations that Decrease Rates

Some home renovations that decrease your rates include:

• Upgrade Wiring: Old wiring can lead to a fire. Replacing your wiring is not only smart but also helps you save on your home insurance.
• Auto Water Shut-Off Devices: Install auto shut-off devices that stop water leaks and damage. Water alarms also help and could shave money off your rates.
• New Roof/Shatterproof Windows: A new roof helps your house weather storms better. Shatterproof windows, especially in Mississippi, could save you money on your insurance.

New siding is a good investment in fortifying your home against perils. However, if you use expensive or luxury materials, your rates may increase, canceling out any savings.

When you upgrade your home, your insurance does not cover the cost. It only pays to replace or repair your home after a disaster. Other things not covered are expensive items like jewelry, furs, cars, collectibles, mold, fungus, animal damage, pest infestations, and rodents.

Discussing a potential renovation with your local agent before breaking ground is crucial. Find out how it will impact your coverage, how much more you might need after, and how it will affect your rates.

People who rent homes (condos, apartments, and houses) also need homeowners insurance, but it's slightly different. Renters insurance has no dwelling coverage. That must be covered by the owner on their own policy. Renters insurance does include personal property coverage, liability, medical payments, and loss of use. After a covered peril, the insurance company will pay to replace your personal belongings or cover your legal bills if someone gets hurt in your place. Some covered perils include windstorms, fire, vehicle damage, theft, vandalism, and other types of storms.

Some of the items that renters insurance covers are:

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

Renters in Vermont pay an average of $117 a year, which is $68 less than the national average. However, you will pay more if you live in a city rather than the suburbs or a rural area.

Condo owners also need homeowners insurance. It protects them after a qualifying event. However, it is different from homeowners insurance in a couple of ways. First, each condo association will have its own master policy that covers dwellings and will pay to replace each building and restore it to its original condition (when first built). The problem is that condo owners usually upgrade flooring, fixtures, appliances, kitchens, and baths over time. The condo insurance (HO-6) restores the interior back to its most recent condition with all the upgrades. Condo insurance also includes liability, medical payments, loss of use, and loss assessment coverage.

Renters' insurance does not cover dwellings, but condo insurance does, but it is limited to the interior. The liability portion only covers people who get injured inside the condo, not outside or on common grounds.

Condo insurance will pay to replace the following items:

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

Vermont condo owners pay an average of $289 a year or $24 monthly, which is a fraction of the national average of $625 for $60,000 of personal property, $300,000 of liability, and a $1,000 deductible.

Some tips for saving on condo insurance in Vermont include:

• Raise Your Deductible
• Review and Adjust Your Policy Every Year
• 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

Vermont is a reasonably safe state with fewer severe weather events than most. As a whole, Vermont's homeowners insurance industry has fared well. The insurance market has generated consistent profits for the past ten years. Vermont insurers suffered far fewer losses than any other state in the country. If trends like these continue, Vermont insurance providers should remain profitable and stay operating within the state, making it easy for property owners to find the coverage they need.

Vermont is subject to hurricanes, flooding, wildfires, and heavy winter storms. Even a few disasters per year can quickly turn the tide, and insurance carriers could see higher losses, resulting in them limiting coverage or canceling customers with heavy claims.

No federal agency governs the homeowners insurance industry. Instead, it's left up to each state to decide. The state appoints an agency or department to monitor providers and rates, investigate customer complaints, and sanction the guilty firms. In Vermont, this agency is the Department of Financial Regulation Insurance Division, located at 89 Main Street, Drawer 20, Montpelier, VT 05620.