Homeowners insurance may be the trickiest insurance coverage of all, especially when it comes to getting a claim covered in case of an emergency like a fire or other catastrophe.
How much is just right and what does it cover? Your friends at Money Examiners have the answers you need to get you saving money on homeowners insurance, and we won’t even send you a “premium due” bill after sharing with you.
1- Don’t Feel Like You’re Stuck with Your Auto Carrier: Your car insurance insurer has probably been in your mailbox already, telling you about the X amount of % savings that you can get by combining coverage. See what they have to say, but by all means shop around. A 20% savings that has you still paying too much premium isn’t a deal at all. The right carrier for you is out there. It just may not be with your auto agent.
2- Know the Difference between the Value of Your Home and its Replacement Cost: You may be able to sell your home for $250,000. If so, you should probably insure it for $175,000. Why the difference? The two most common homeowner claims are fire and theft. The land that your home sits on won’t burn or get stolen.
3- Inventory Your Possessions: Once a year you should examine your possessions and estimate replacement value. Don’t forget your closet. Every item of clothing that you possess will need to be replaced in case of a total loss. Once that’s done, make sure that your coverage for possessions is 75% of the total. Remember that total loss only accounts for 0.5% of insurance claims, and the 25% undercover can lower your premiums substantially. Besides, that SpongeBob thong was a really bad idea in the first place. You won’t be replacing that.
4- Careful with Fire: Can you give me a good reason why you’re still smoking? I didn’t think so. Not only does your living room smell, but your carpets have burn holes and the likelihood of you setting the bedroom on fire is infinitely lower if you stop.
Candles can be a problem too. I know it is romantic to have scented candles burning in every room of the house, but there is nothing romantic about setting your face on fire with unattended hot wax. Candles are the leading cause of partial loss homeowner insurance claims since 2002.
5- Know the Geography of the Home: You found a great deal on a 1700 square foot home with a new roof and a clean claim history. Good for you buy it make sure that it isn’t in a flood plain or straddling an earthquake fault line. Those two details will have a lot to do with the kinds of premiums you’ll be paying.
6- Work with Your Insurer to Get Discounts: There is some variation in how carriers handle discounts for homeowners insurance. Make sure your agent knows about every dead bolt lock, every smoke alarm and every burglar alarm. If those measures don’t yield savings, go shopping for new coverage.
About the Author
Kim Hastings is a published reporter and novelist with over 20 years writing experience in fields ranging from sports, to travel, to religion and philosophy as well as financial matters. He is a graduate of Northwest Christian University, has one son and lives with his wonderful wife DeeDee in Tacoma, Washington.