Most purchasers of single-family homes in New York probably do not fully understand the scope of their homeowners insurance policy. Often this policy is obtained as an afterthought on the eve of closing in order to obtain bank clearance to close. However, as with any contract, the devil is in the details, and in this case, the policy exclusions.
For example, the New York Insurance Law does not require a homeowners insurance policy to provide pollution coverage. What does that mean in lay terms? If there is a discharge of oil from an above-ground or underground oil tank, damage to the property may not be covered and the homeowner may be liable for thousands of dollars in cleanup/remediation costs.
The New York State Department of Financial Services includes a good explanation for the legal basis of such exclusion on its website: http://www.dfs.ny.gov/insurance/ogco2001/rg110221.htm
It is important to note that the State establishes minimum requirements for insurance policies and some insurers may choose to cover risks that others do not. Before purchasing real property in the State of New York, a sophisticated purchaser would be wise to consult with an experienced insurance agent about their options vis-a-vis homeowners insurance.
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The Law Offices of Keith R. Betensky, Esq.
The Empire Building
26 Village Green, Suite 4
P.O. Box 22
Bedford, New York 10506-0022