Insurance is one of those items that falls under the category of “better to have and not need, than to need and not have.” That is very true when it comes to homeowner’s insurance. As long as you are paying off a mortgage you’ll be required to carry a homeowner’s insurance policy. But it is something you should have all the time because all of us are just one fallen tree away from disaster. Of course, just because you need a homeowner’s insurance policy doesn’t mean you have to pay huge rates for one. Here are 4 smart ways to save on your homeowner’s insurance:
You could be loyal to many brands that you trust. With insurance policies, there are many options and not just with a carrier who you and your family have been with for years. It helps to do a policy review at least once a year to compare other carriers an policies. By shopping around you could find solid policies at lower rates than you’re paying now. Even if you save $50 a month, it will add up to $600 a year. Who couldn’t use an extra $600?
Raise your Deductible
You probably learned with your first insurance policy that the hire the deductible, the lower the premium payments. This also implies with a homeowner’s policy. Again, you’ll want to crunch the numbers to find out if this is worth the savings (it probably will be). At least you won’t feel so bad paying for insurance that might not get used in a year or two. As for that deductible, it’s a good idea to take the money you’re actually saving and put it into an account where you build up the money for that deductible. Then just let it sit there. That way if it is needed it will be waiting for you.
Keep Value and Rebuilding Costs Separate
The value of your home is two parts. It is the actual structure of the house and it is the land it sits on. Your homeowner’s insurance should reflect the needs for rebuilding the structure not recouping what the land might be worth. If you price your insurance to reflect the value of the land, then you’re going to be paying higher premiums. Very simple: Before settling, talk to a home builder and get an estimate for how much it would cost to rebuild your home from the ground up. That is where your policy should be.
OK – we said 3 smart ways to save on homeowners insurance – but here is a bonus tip!
These days it is very rare to find a major insurance carrier that doesn’t write policies for all types insurance concerns. You might find that bundling your auto insurance with your homeowner’s policy under the same carrier could score you a discount. Just be sure that what you’re paying separately isn’t cheaper than the bundle. Do your homework.
Are you ready for a homeowner’s insurance policy review?