Tips to Save Money On Your Homeowners Insurance
For each family, many of the goals are similar; whether it is getting rid of the pool man and gardener or whether opting to forgo going out to eat, all homeowners are seeking ways to reduce monthly expenses. Many property owners are leaving hard earned dollars on the table when it comes to Property Taxes and Homeowners Insurance.
It is common for us to avoid dealing with financial decisions; agreeably, it is boring, difficult to understand, and full of confusing details. There are a few steps that one can take to reduce their homeowners insurance premium.
1. Compare Rates. It is wise to obtain home insurance quotes from a few different insurance companies in order to research different coverage options and to conduct a fair comparison of premium charged in the area. When buying a home, it is best to get quotes as soon as you have decided on a home; if simply shopping around, it is best to compare rates from a few carriers 30 days prior to your current policy’s expiration date. Today, you can obtain a FREE Quote Online as long as you’re confident about the topic.
2. Review Discount Options. Carriers offer a variety of discounts which vary from state to state. Most carriers offer Monitored Alarm System Discounts, Gated Community Credits, Marital Status Credits, Senior Discounts, Multiple Policy Credits and a long list of other credits. On average, one can save 10 to 35 percent off their premium simply for asking to review all available discounts.
3. Security and Prevention. Smoke detectors, Fire Sprinklers, Alarm Systems, Carbon Monoxide Detectors, Motion Sensors, Surveillance Cameras, Water Flow Sensors and Deadbolt Locks are all safety mechanisms which may lower your insurance premium as well as your risk of loss.
In regions of adverse weather, storm shutters and reinforced roofs would be of great value. On older homes, an updated electrical system, updated circuit breaker box, and updated heating and air conditioning systems may be advantageous in reducing risk and home insurance premium.
4. Raise Your Deductible. Uninformed homeowners enjoy seeing the lowest available deductibles on their policies; however, the truth is that insurance companies profit greatly on underwriting policies with lower deductibles. In most cases, the insurance premium may vary as much as 50% from the lowest to highest available deductible. The coverage remains the same; the Liability Portion of the policy most often has no applicable deductible anyway.
Taking a little more risk on the small end could well save the homeowner more in premium in the long run. The likelihood of a homeowners insurance claim is once every 12 – 15 years. Calculating the savings over that period is most beneficial to the customer with the highest deductible.
5. Estimate Reconstruction Value. Dwellings are insured for full reconstruction value; this means that if the home were totally destroyed by a covered loss, the insurance company would pay the amount necessary to reconstruct the home as it was prior to the loss. Where the market value includes the value of the land, intrinsic value, geographic benefits (school districts, proximity to transportation etc…), and the value of the home, reconstruction value is simply the cost to rebuild the dwelling using present reconstruction data. During an economic downturn, the market value of homes could be well below the full retail reconstruction value of the house. During a peaking real estate market, the reconstruction value could be well below market value. It is important to understand that Market Price is not relative to Homeowners Insurance.
It is wise to consult with a neutral party like an Escrow Officer or perhaps a Consumer Affairs Officer at the State Department of Insurance. All states have a toll free number for consumers to call for consultation regarding industry questions and/or complaints. It is a great idea to revisit your insurance policy details every 3 – 5 years and whenever there are any material changes to your home which need to be addressed. Circumstances change and the purpose of the insurance is to offer protection for the term of coverage.