MA REAL ID

MA REAL ID

 

 

 

 

 

After October 1, 2020, you will need a MA REAL ID or a passport to fly within the United States or enter federal buildings.

A MA REAL ID:

  • Is a valid driver’s license or identification card
  • Is valid as a form of federal ID
  • Requires an in-person visit
  • Has a star displayed on the document to indicate that is a federally compliant card

Once you’ve decided if you want a MA REAL ID, get the right documents together. You’ll need to prove your:

  • U.S. citizenship or lawful presence
  • Social Security number
  • Massachusetts residency

All documents must be originals, photocopies and laminated documents will not be accepted.

A document cannot be used to prove more than one requirement.

U.S. Citizenship or Lawful presence documents

1 document from this group for either REAL ID or a Standard driver’s license/ID.

Lawful presence means that you’re legally living in the United States according to federal immigration laws. All U.S. citizens and lawfully permanent residents have permanent lawful presence in the U.S.

Non-U.S. citizens who are studying, working, or living temporarily in the U.S. may have temporary lawful presence that may vary in length.

For U.S. citizens, a valid, unexpired U.S. passport is sufficient proof of lawful presence. U.S. citizens may also provide a certified copy of their U.S. birth certificate.

For permanent residents, a valid permanent resident card (green card) is enough.

For non-U.S. citizens, you need to provide valid, verifiable immigration documents as well as proof that you’ve been granted a legal stay in the U.S. for at least 12 months. Your license or ID will expire when your legal stay is over.

Whether you’re getting a MA REAL ID or a Standard driver’s license/ID, you’ll need one of these:

  • Valid, unexpired U.S. passport or passport card
    • If your U.S. passport was issued within the last six months, bring your certified copy of your U.S. birth certificate
  • Certified copy of a birth certificate filed with a State Office of Vital Statistics or equivalent agency in the individual’s state of birth
    • A Puerto Rican birth certificate will only be accepted if it was issued on or after July 1, 2010. For more information on the Puerto Rican birth certificate law, visit the Puerto Rico Federal Affairs Administration website. 
  • Consular Report of Birth Abroad (CRBA) issued by the U.S. Department of State, Form FS-240, DS-1350, or FS-545
  • Valid, unexpired Permanent Resident Card (Form I-551) issued by DHS or INS
  • Temporary I-551 stamp in foreign passport
  • Unexpired employment authorization document (EAD) issued by DHS, Form I-766, or Form I-688B
  • Unexpired foreign passport with a valid, unexpired U.S. visa affixed
    • A non-US passport must contain a current visa and be presented with an I-94 Record of Arrival and Departure, unless you have a Permanent Resident Card or other change in status. The I-94 can be either a paper version from U.S. Customs and Border Protection or a printout of an electronic version downloaded from their website.
    • For applicable customers who have a Certificate of Eligibility (I-20) or Certificate of Eligibility for Exchange Visitor Status (DS-2019) documentation verifying the applicant’s most recent admittance into the United States must be shown
  • Certificate of Citizenship, Form N-560, or Form N-561, issued by DHS
  • Certificate of Naturalization (Form N-550 or N-570)
  • Re-Entry Permit (I-327) – accepted for Standard credential only
  • Refugee Travel Document (I-571) – accepted for Standard credential only

Note: The federal government allows for some exceptions to those in temporary protected status (TPS). See Department of Homeland Security’s website for current countries designated for TPS.

Social Security Number (SSN) documents

1 document from this group for either REAL ID or a Standard driver’s license/ID.

You must have a valid Social Security Number (SSN) to apply for any learner’s permit, driver’s license, or ID card. The RMV will validate the SSN you provide against computer records at the Social Security Administration (SSA). If you do not have an SSN, you may request an application for one by calling (800) 772-1213.

If you’re getting a Standard driver’s license/ID, you’ll only need to provide your valid SSN.

If you’re getting a REAL ID, you’ll need to bring 1 of the following documents displaying your 9-digit SSN:

  • SSN Card (cannot be laminated)
  • W-2 Form*
  • SSA-1099 Form
  • Non-SSA-1099 Form
  • A pay stub with the applicant’s name and full SSN on it*
  • SSN Denial Notice with passport, visa, and I-94

*One (W-2/paystub) cannot be used for both the Massachusetts residency and SSN requirements.  Two different (W-2s/paystubs) from different employers can be used for both requirements.

If you do not have an SSN, you should apply for one at a Social Security office as soon as possible. If you are denied an SSN, you may still qualify for a Massachusetts driver’s license or ID card if you can meet other identification requirements. However, to prove that you applied for an SSN, you must present the written denial notice the SSA provided you. The RMV requires your SSN or denial notice to confirm your identity and to maintain your license and driving records.

Note: All CDL applicants must have an SSN.

Massachusetts residency documents

1 or 2 1 for a Standard driver’s license/ID, 2 for a REAL ID

To prove Massachusetts residency, you’ll need a document showing your current residential address. A P.O. Box isn’t acceptable. Neither is a document mailed “in care of.”

You’ll need 2 of these documents for a REAL ID. Standard driver’s license/ID applicants need 1 of the following:

  • Massachusetts RMV-issued documents (can use one from the options below)
    • Current license, Massachusetts ID card, or learner’s permit (liquor ID not accepted)
    • RMV-issued correspondence dated within 60 days and received via U.S. mail (including license/registration reminders)
  • State/federal/municipal/city/town/county agency-issued documents
    • 1st class, government-issued mail dated within 60 days
    • Current MA-issued professional license with photograph
    • Medicaid statement dated within 60 days
    • Current firearms card
    • Jury duty summons dated within 60 days
    • Court correspondence dated within 60 days
    • Property tax for current year
    • Excise tax for current year
  • Bills
    • Utility bill (electric, telephone, water, sewer, cable, satellite, heating) dated within 60 days
    • Credit card statement dated within 60 days
    • Medical/hospital statement dated within 60 days
    • Cell phone bill dated within 60 days
  • Lease or Mortgage
    • Current lease/mortgage or similar rental contract
  • Financial-related documents
    • Bank statement that contains images of cancelled personal checks dated within 60 days
    • W-2 wage and tax statement from immediate prior year*
    • Current pension statement (401k, 457, SEP, etc.)
    • Current retirement statement
    • Pay stub dated within 60 days*
    • Current SSA statement
    • Current installment loan contract (car loan)
  • School-issued documents
    • Official school transcript for current year
    • Official letter from school (proof of enrollment) dated within 60 days
    • Tuition bill for current year
    • Certified school record for current year
  • Insurance-related documents
    • Auto insurance policy for current year
    • Renter’s insurance policy for current year
    • Homeowner’s insurance policy for current year
  • Alternative Residency Affidavit
    • For applicants under 18 only

*One (W-2/paystub) cannot be used for both the Massachusetts residency and SSN requirements.  Two different (W-2s/paystubs) from different employers can be used for both requirements.

NAME MUST MATCH for REAL ID

If your current name doesn’t match the one that appears on your lawful presence document(s), you must prove your legal name change in order to qualify for a REAL ID driver’s license/ID card. If multiple name changes, documentation for each name change must be provided. You will need to provide one of the following:

  • Marriage Certificate (must be issued from the municipality)
  • Divorce Decree
  • Court Document

Formulated in the wake of September 11 and passed by Congress in 2005, the REAL ID Act was passed to “set standards for the issuance of sources of identification, such as driver’s licenses.”

The act established minimum security standards for state-issued driver’s licenses and identification cards, and it prohibits federal agencies from accepting licenses and identification cards from states that do not meet these standards for official purposes.

It was aimed at eliminating airline terrorism by increasing requirements to obtain documents granting access to domestic planes.

You can start your MA REAL ID application online by clicking HERE.

 

Playoff Chili

Game Day Chicken Chili

Game Day Chicken Chili Recipe

Ingredients

  • 4 cups chopped yellow onions (3 onions)
  • 1/8 cup good olive oil, plus extra for chicken
  • 1/8 cup minced garlic (2 cloves)
  • 2 red bell peppers, cored, seeded, and large-diced
  • 2 yellow bell peppers, cored, seeded, and large-diced
  • 1 teaspoon chili powder
  • 1 teaspoon ground cumin
  • 1/4 teaspoon dried red pepper flakes, or to taste
  • 1/4 teaspoon cayenne pepper, or to taste
  • 2 teaspoons kosher salt, plus more for chicken
  • 2 (28-ounce) cans diced tomatoes in puree, undrained
  • 1/4 cup minced fresh basil leaves
  • 4 split chicken breasts, bone in, skin on
  • Freshly ground black pepper
  • For serving:
  • Chopped onions, corn chips, grated cheddar, sour cream, cilantro

 

Directions

  • Cook the onions in the oil over medium-low heat for 10 to 15 minutes, until translucent. Add the garlic and cook for 1 more minute. Add the bell peppers, chili powder, cumin, red pepper flakes, cayenne, and salt. Cook for 1 minute. Add diced tomatoes to the pot with the basil. Bring to a boil, then reduce the heat and simmer, uncovered, for 30 minutes, stirring occasionally.
  • Preheat the oven to 350 degrees F.
  • Rub the chicken breasts with olive oil and place them on a baking sheet. Sprinkle generously with salt and pepper. Roast the chicken for 35 to 40 minutes, until just cooked. Let cool slightly. Separate the meat from the bones and skin and cut it into 3/4-inch chunks. Add to the chili and simmer, uncovered, for another 20 minutes. Serve with the toppings, or refrigerateand reheat gently before serving.

Happy New Year from your friends at Johnson & Rohan Insurance

Happy New Year from your friends at Johnson & Rohan Insurance

As the 26th anniversary of Johnson & Rohan Insurance rolls around, we’d like to wish everyone the happiest of New Years!

We’d also like to thank you for your business.

Wherever you live, we understand there are probably many insurance agencies between your house and our Agency.

We will continue to work hard to earn your business.

Whether it’s reviewing your renewal, running to the Registry, or assisting at a stressful claim time, we are always happy to help.

In 2019 we invested in new, Microsoft compliant computers, as well as our Agency management and comparative rating systems.

Although the insurance industry has changed we’ve found, over the years, time and time again: it’s all about the markets.

If you have the right market you can find the most competitively priced policies for all sorts of insurance products.

We have the markets.

We rate personal auto insurance with 7 companies and even more companies for home, business and life insurance.

If you ever have any questions, please give us a call, click or stop by.

Happy New Year from your friends at Johnson & Rohan Insurance

Merry Christmas

 

 

Happy Holidays

 

 

 

 

 

 

Happy Holidays from our family to your family.

Our office will be open on Tuesday, December 24th from 9:00 am – 2:00 pm.

We will be closed Christmas Day, re-opening Thursday, December 26th.

If after hours, following please find some of our companies’ off-hours claim reporting telephone numbers:

Travelers/ Premier:  1-877-425-2466

Vermont Mutual: 1-800-435-0397

Safety Insurance:  1-866-906-5016

MPIUA:  1-800-392-6108

Progressive: 1-800-776-4737

Commerce/MAPFRE: 1-800-922-8276

Amica: 1-800-242-6422

Plymouth Rock/Pilgrim Insurance: 617-951-1620

Hagerty Insurance: 1-800385-0274

Swyfft Insurance:  1-855-479-9338

 

Winter Storm Preparedness

How to Help Prepare for a Snow Storm

By Travelers Insurance

Is there a winter storm on the horizon? Take some time now to gather the supplies you will need to ride out the storm at home, or to safely venture outside if you must. Once you have taken the appropriate precautions, you can focus on enjoying the winter wonderland outside your window.

Check Your Supplies

Check your supplies winter preparation

  • Make sure you have a snow shovel and ice melt to keep walkways clear and safe.
  • Check that you have sufficient heating fuel for your home and fuel for your generator, if you have one.
  • If you will be using a fireplace or wood-burning stove, you should have a good supply of dry, seasoned wood.
  • Have warm clothing and blankets on hand, and stock non-perishable food items and necessary medications to last you and your family for several days.

Get Ready for a Power Outage

winter preparation first aid

  • Turn your heat up now, and close off any rooms that are not in use.
  • Check pipe insulation, and if you lose power, allow water to run at a trickle to prevent pipes from freezing.
  • Charge your battery-powered electronic and communications devices.
  • Keep a battery-powered radio on hand to stay aware of changing weather conditions.
  • Get out your flashlights, batteries, first aid kit and other emergency supplies.

Stay Warm — and Safe

Fireplace as part of winter preparation

  • If you start a wood-burning fire, follow all fireplace or woodstove safety precautions.
  • Do not use an oven or a range as a home heating device.
  • If you have a generator, only use it outside, where there is sufficient ventilation.
  • Test all smoke and carbon monoxide alarms to ensure they work properly.
  • Do not let candles burn unattended, and keep them away from combustibles. Battery-powered LED lights are a safe, energy-efficient alternative to traditional candles.
  • If you have an ice dam prevention system, turn it on before the snow starts to fall.

Stay Inside — and Safe

Looking inside through a window

J&R’s Winter Driving Tips

Winter Driving Tips

Winter Driving Tips by Johnson & Rohan Insurance

Here it is, early December and already the season’s first big storm! Here in Lynnfield, we got close to a foot of the wet & heavy.

Here are tips to keep in mind when driving in winter conditions:

Beware of snow banks! Go slow when pulling in and out of parking lots or side streets. Drive slow, in general, because you can’t see vehicles driving in and out of parking lots and side streets. Road are narrower and driving more harrowing. Be careful.

Be prepared.  Have your mechanic check your car’s battery, brakes, fluid levels and tire wear.  Keep your gas tank more than half full- it lowers the chance of freezing and you’ll also avoid running out of gas if your stuck in a traffic jam on 128.

Take care in pulling out.  Your car reacts differently to accelerating on snow, make sure there is plenty of time/space to get your car up to speed.  Remember other vehicles may have trouble braking because of the conditions.

Back your car into the driveway when possible.  You’ll have better vision when pulling out.

Be aware of walkers or joggers on the street. When sidewalks are impassable, die hard joggers and dog walkers are forced to venture onto the street for a clearer path.   Keep an eye out for them!

When waiting to make a left hand turn, keep the wheels of your car pointed forward.  If your wheels are turned to the left and you are rear-ended, your car will be pushed into the path of on-coming traffic.

Braking.  If your car does not have anti-lock brakes and you start to skid, pump the brakes to gain control of the skidding.  If your car has anti-lock brakes, slam and hold down the brakes to allow the anti-lock system to take over.

When you must travel during a storm, notify others of your estimated time of arrival and your intended route.

If stuck, stay in the car and wait for help.  Run the engine and heater sparingly.  Also make your exhaust pipe is clear from snow and ventilate your car to prevent carbon monoxide build up.

If stuck in a storm, preserve your energy.  Have food (energy bars, trail mix, beef jerky) in your car.   They will provide your body with energy to produce its own heat.  Have water available to prevent dehydration.  Don’t eat snow, it lowers your body temperature- if necessary, melt it first.

Prepare a Winter Driving Kit and leave it in your trunk.  Your kit should include an extra pair of gloves, blankets, an ice scraper, food basics (energy bars, trail mix or beef jerky work well), water or energy drink.  An affordable car battery- air compressor can provide a battery charge or refill a flat tire.

Driver New to Winter Driving?  Find an open location with wintry conditions and let the inexperienced driver practice accelerating and braking on snow.  Your car will behave differently on snow and ice and a little practice can make a big difference.

 

 

 

 

 

 

 

 

Happy Thanksgiving

Happy Thanksgiving

From our family to your family: Happy Thanksgiving.

We are thankful for having you as a client!

We understand that there are many options for insurance, from the big-budgeted advertisers, to the small agencies between your home and our office.

We promise to treat you as we want to be treated.

Our office will be closed on Thursday, Thanksgiving Day and on Friday, November 27, 2019.

Our office will re-open Monday, unbelievably: December 1st.

We hope your Thanksgiving is full of peace, love and a plate full of food.

Thank you for your business.

New Registration and Title Application (RTA) and New Registrations

New Registration and Title Application (RTA)

The Massachusetts Registry of Motor Vehicles has announced that after December 12, 2019, they will no longer accept the familiar, triplicate RMV-1 and RMV-3 forms.

Replacing them is the new, single-copy: Registration and Title Application (RTA)

The RMV currently has a Registration and Title Application (referred to as an RMV-1) and a Registration and Title Amendment Form (referred to as an RMV-3). With ATLAS  Release 2, these two forms have been combined into one — the new Registration and Title Application (RTA). This new RTA form supports additional information the RMV will use in their business processes after ATLAS R2 implementation. Examples include the garage address, expanded sales and use tax information, slight changes to the vehicle description, and a general layout that follows the screen flow in the ATLAS system.

This updated form will be implemented as of November 12, 2019.  However, the RMV will continue to accept the old RMV-1 form as long as it was stamped and dated by an insurance company or agent prior to November 12, 2019.  Since the insurance stamp is valid for 30 calendar days, the last day for an old RMV-1 form to be accepted will be December 12, 2019.

NEW:  Certificate of Registration

With ATLAS Release 2, the Certificate of Registration will be changing to include the Change of Address for Residential, Mailing, and Garaging.

Governor Baker Signs Legislation Requiring Hands-Free Use of Electronic Devices While Driving

hands free

According to Mass.gov:

BOSTON — Today, Governor Charlie Baker signed legislation to improve road safety in the Commonwealth, which stipulates that no motor vehicle operator may use electronic devices while driving unless the technology is being used hands-free. The legislation, which adopts recommendations from the Commonwealth’s Strategic Highway Safety Plan, also sets forth penalties for violating the law and requires that law enforcement officers report data on violations so the information can be shared with the public.

Governor Baker was joined at the signing ceremony by Lt. Governor Karyn Polito, state leaders, officials with the National Transportation Safety Board, and representatives from advocacy groups, including, the Vision Zero Coalition, Safe Roads Alliance, LiveableStreets Alliance, WalkBoston, MassBike and Boston Cyclists Union. The Governor acknowledged the work of stakeholders for efforts to get hands-free legislation passed and thanked the families of victims for sharing their personal stories during legislative hearings.

“Our Administration is committed to keeping the Commonwealth’s network of roads safe, and this legislation will substantially reduce distracted driving and hold operators accountable when they are looking at an electronic device instead of looking at the road ahead,” said Governor Baker. “We are especially grateful for the many advocates and families that passionately fought to bring this bill to fruition, are thankful for the Legislature’s collaboration on this bill and look forward to continued efforts to improve road safety in Massachusetts.”

“The Commonwealth and its communities have a shared obligation to keep roads safe for all users, and the new hands-free law is another important step as we seek to fulfill that responsibility,” said Lt. Governor Polito. “This commonsense legislation makes clear that in order to operate a vehicle safely, individuals must put safe driving first – ahead of reading emails or texting a friend.”

Under the new law, titled An Act requiring the hands-free use of mobile telephones while driving, operators of motor vehicles and bicycles cannot use an electronic device unless the device is being used in hands-free mode. Operators cannot read or view text or look at images or video, unless what is being viewed on the device is helping with navigation and the device is mounted in an appropriate location. They also cannot make phone calls unless they are able to do so without holding the phone, utilizing technology such as Bluetooth.

The new law permits the use of electronic devices if they are being used in response to an emergency, necessary for first responders to do their jobs. It also permits use if operators are stationary and not in active lanes of travel.

Punishment for violating the hands-free law includes a $100 fine for a first offense, $250 fine for a second offense and $500 fine for a third or subsequent offense.  A third or subsequent offense will count as a surchargeable incident.  Operators who commit a second or subsequent offense are required to complete an educational program focused on distracted driving prevention.

“The hands-free legislation is now law in Massachusetts thanks to the tireless work of advocates and victims’ families,” said Transportation Secretary and CEO Stephanie Pollack. “Legislators were moved to action after hearing the personal stories of people who have lost loved ones in traffic crashes. Advocacy groups were with the families every step of the way and marshaled support for this bill. I would like to thank the Vision Zero Coalition, Safe Roads Alliance, LiveableStreets, WalkBoston and many other pedestrian and bicycle advocacy groups for their efforts and I look forward to continuing our collaboration to get additional road safety bills passed during the next legislative session.”

“This important reform shows how seriously we take roadway safety,” said Secretary of Public Safety and Security Thomas Turco. “A distracted driver is a dangerous driver. This law will help keep drivers’ attention on the road and give law enforcement an additional tool to deter risky behavior.”

“As first responders to serious crashes across the state every day, Massachusetts State Troopers know too well the consequences of distracted driving, and we thank the Baker-Polito Administration and the Legislature for this important new tool to help us combat this dangerous behavior,” said Colonel and Superintendent of the Massachusetts State Police Christopher S. Mason. “Today is a day that will make our roads safer.”

“This legislation will protect pedestrians and drivers on our roads by keeping mobile devices out of the hands of those who operate vehicles,” said House Speaker Robert A. DeLeo. “Additionally, this legislation establishes a new implicit bias training program for any jurisdiction deemed by an analysis of data to have engaged in racial or gender profiling.”

“There are too many heartbreaking stories of those who lost loved ones to distracted driving, and so I’m proud to see this bill signed into law,” said Senate President Karen E. Spilka. “This bill strikes a balance between increased enforcement and increased transparency, requiring more demographic data to be released to the public than ever before so that we can ensure this law is being enforced equitably across the Commonwealth. I’d like to thank Senator Boncore, Senator Brownsberger, and everyone involved for their hard work to get this done.”

“This bill will improve the safety of our streets and promote transparency in law enforcement,” said Senator Joe Boncore, Chair of the Joint Committee on Transportation. “Distracted driving is an epidemic, and this bill will save lives. Further, by updating our data collection laws, we will better understand and improve our communities’ interactions with public safety officials.”

“The final bill is a major public safety improvement for the residents of Massachusetts,” said Representative Bill Straus, Chair of the Joint Committee on Transportation. “Distracted driving has caused too many unnecessary tragedies and I am pleased that our state will now join the ranks of other states who have adopted a ban on holding a phone while driving.”  

Safe Roads Alliance President Emily Stein added, “It is such a relief to finally see a hands-free bill pass in our Commonwealth. It is a proud, emotional, and hopeful moment, and I ask that all drivers in Massachusetts pause for a moment too, and understand how distracted driving can impact so many precious lives on our roads. I fought for stronger distracted driving laws for my dad, who was killed in 2011, and also for the hundreds of lives that are lost, and the thousands of people who endure life-long injuries because of something so preventable. This law will save lives.”

“We are grateful for the leadership and partnership of the Baker-Polito Administration in moving this life-saving law forward,” said Stacy Thompson, LivableStreets Alliance Executive Director.  “This is an important step toward achieving Vision Zero in Massachusetts and we look forward to working with the Administration and Legislature to advance several other critical road safety bills in the new year.”

Stacey Beuttell, Executive Director of WalkBoston, added, “WalkBoston is pleased that this legislation has been signed; this law will encourage people driving to focus solely on that task, making streets safer for people walking & running in communities across Massachusetts. We’re hopeful that this long-awaited signing will kick off a focus on traffic safety for this next legislative session.”

“We applaud the Legislature and Governor Baker’s Administration for delivering this bill to the people of Massachusetts,” said Becca Wolfson, Executive Director of Boston Cyclists Union. “The regional rise in bike ridership means there are more vulnerable road users than ever in Massachusetts, and this law will curb distracted driving and make streets safer for everyone.”

The hands-free law takes effect ninety days after passage and has reporting requirements for law enforcement officers who make traffic stops. They must make note of data, including the age, race and gender of individuals issued a warning or citation. The Registry of Motor Vehicles will house the data and the Secretary of Public Safety’s office will annually release the information to the public. The new law sets forth a process in the event there are suspicions a law enforcement entity may be engaging in racial profiling.

The hands-free legislation is one proposal included in a comprehensive road-safety package filed earlier this year by the Baker-Polito Administration. That proposal includes measures to improve work zone safety, require the use of ignition interlock devices for first time offenders, and the creation of a framework to regulate new technology like electronic scooters and other low-speed mobility devices. For additional information, please visit: https://www.mass.gov/news/baker-polito-administration-files-legislation-to-improve-road-safety

What’s the Best Homeowner Deductible?

Deductibles and your Homeowner Policy

What's the best homeowner deductible?The relationship between your homeowners deductible and premium can feel like a game of cat and mouse. Should I raise or lower my deductible? How much responsibility and risk should I absorb? Should I have a $1,000 deductible on my homeowners insurance, or should I opt for more or less to save on my premiums?

Let’s go through the basics of what a homeowners insurance deductible is and how you can choose the right number for you.

What is a deductible?

A deductible is the amount you are responsible to pay before your insurance kicks in to cover a claim (up to your coverage limits). The deductible is what’s “deducted” from your claim payment.

Let’s say your home is insured for $50,000 on your homeowners policy. You have a deductible of $1,000. Unforeseen water damage ends up costing you $3,000. When you submit a claim, you would be responsible to pay $1,000, and your insurance company would send you a check for the remaining $2,000 in lost property.

But let’s say that the water damage only costs $800. This is less than your deductible of $1,000, so your insurance company wouldn’t pay you anything.

Keep in mind that the insurer will only pay up to your coverage limits. Let’s say the water damage equates to $55,000 in damage. You would still be responsible for $1,000 due to your deductible. Then, your insurance company would cover $50,000 in losses, because that is the total amount of insurance coverage on your home. That means you would be missing $4,000 you would have to pay out of pocket.

How is a deductible determined?

There are two types of deductibles you’ll find in homeowners policies: dollar amount and percentage. The first type of deductible is more common. This specifies a dollar amount that you would pay out of pocket, like $1,000.

The second type is a percentage of the total amount of insurance on your policy. This only applies to homeowners policies, not auto coverage. This is based on the percentage of your home’s insured value. For example, your insurer offers a 2% deductible.  Your home is covered for $100,000 in property damage (not including liability). That means you would have a $2,000 deductible.

When searching for or switching your home insurer, make sure you ask how that company determines your deductible and how much you maintain control over your own deductible rate.

Why is there a deductible?

Curious why deductibles even exist? The purpose of a deductible is to share the risk between you and your insurer. It makes sure you have some skin in the game.

If you didn’t have a deductible, you could make claim after claim and not have to pay a cent (although your premiums would likely increase). A deductible ensures you’re only submitting important claims, and you’re not taking unnecessary risks that could damage your home. It also helps prevent insurance fraud, because people are less likely to submit a claim if they have to pay out of pocket as well.

What does a homeowners’ deductible apply to?

Deductibles typically only apply to “hazard coverage.” Hazard coverage involves property damage to your house or personal belongings. This usually also includes “additional structures” under Coverage B, which is part of a standard homeowners property policy. Still, you’ll want to talk to your insurance agent to determine your deductible for Coverages A and B.

Deductibles don’t usually apply to liability coverage, which is when a guest is injured in your home or on your property.  Often your insurer will pay the full amount for any liability claims (up to your coverage limits).

How much should my deductible be?

Most homeowners get stuck on this question. A higher deductible usually means a lower premium (monthly payment), while a lower deductible means a higher premium.

But which deductible-premium ratio is better?

Most insurers set the average minimum homeowners deductible at $1,000, while others put the minimum at $500. Most insurers will allow you to raise the deductible if you’d like.  Some deductibles can be raised to as much as $10,000.

But does that mean you want the minimum deductible amount? Sometimes yes and sometimes no.

How much can you pay out of pocket?

Raising your deductible is the most effective way to lower your monthly premiums on your homeowners insurance. But, if you were to make a claim, you would have to pay that deductible before the insurance company will pay you. That means you need to still be able to afford that deductible.

For example, if you were to have a $5,000 deductible, you would only start getting paid by your insurance company if the damage were more than $5,000. You would be responsible for 5 grand before the insurance company would even consider sending you a check. If you don’t have $5,000 to pay out of pocket for an incident, you don’t want a deductible that high.

Ultimately, you want to balance the short-term cost you could potentially afford in the case of a claim (the deductible) with the long-term cost of your overall policy (the monthly premiums). The more you could pay out of pocket for your deductible, the more you’d save in the long-term.

We generally recommend raising your deductible as much as you can reasonably afford without impacting your wallet. How much could you pay out of pocket today without it seriously impacting your finances?

Fewer claims means a higher deductible.

Some people also raise their deductible because they don’t make a lot of claims anyway. Every time you make a homeowners claim, your premiums will go up. So you likely wouldn’t want to make a claim for low-cost losses anyway. In that case, it may be in your best interest to have a higher deductible so you’re only worried about paying that cost in the case of a major disaster or large claim.

For example, if your deductible is $1,000 and you have a claim for $1,500, you would only get an insurance check for $500 but your future premiums would likely increase drastically. So you might not submit that claim anyway.

If you’re only submitting large claims, you may want to have a higher deductible. Then you’d save more in premiums in the long-term, and you’d only worry about the deductible cost in the case of serious incidents.

Pro-Tip: Create a deductible-specific account.

Want to make sure you would be able to pay your deductible out of pocket? Put the money aside in its own savings account (where it can collect a little bit of interest anyway). This ensures you’re always protected in the case of a disaster.

Also, the amount you save in your deductible account could equate to your deductible. If you used to have $1,000 in the account but now you can set aside $2,000, for example, you can talk to your insurer about raising your deductible and lowering your premiums.

What are disaster deductibles?

Your insurer may have different deductibles for different types of losses. Although wind, hail, and hurricanes are usually covered under your standard homeowners policy, they may each have their own unique deductible. Flood and earthquake deductibles may vary as well.

Hurricane, wind, and hail deductibles can often be higher than the standard homeowners deductible, especially if you live in an area prone to these sorts of disasters. Your insurer might require a percentage-based deductible rather than a fixed dollar amount. In some states, you have the option to opt out of paying the percentage deductible, but you’ll be stuck with a high premium.

Flood and earthquake offer a range of deductibles depending on the state and your insurer. Compare different options and shop around before making your decision (check out our Johnson & Rohan site www.homeownerquote.com).  Call us at (781) 224-0909 to have us shop you with our different companies.

Conclusion

We often get asked, “So, should I have a $1,000 deductible on my homeowners insurance?” And our answer is always the same: maybe.

Your deductible should be the amount you are comfortable paying out of pocket in the case of damage to your home. We typically recommend $1,000 as the minimum to maintain fair premiums, but you may want to increase your short-term deductible to boost your long-term savings if you’re financially secure enough to pay for a larger deductible out of pocket.