Homes have to be insured, it is a legal requirement. In this article, we will look at ways you can bring down the cost of your home insurance.
The price of home insurance is a thing that all homeowners have to factor in their monthly expenses. It is unavoidable. There are a lot of factors that determine how much the cost of insuring your home will be such as the location of the home and how old the home is. The average amount that homeowners pay annually for insurance premiums is around $1200. That may seem like a lot but having the peace of mind of having the home insured cannot be put into numbers, it is priceless. You may also find that the mortgage company has made it mandatory to have a certain level of coverage. The first thing that you need to figure out is exactly how much coverage you might need. Home insurance is usually put into four different categories and they are as follows.
Image by Pete Linforth
- Dwelling coverage
In case some disastrous event falls on your home, you want to make sure that the cost of rebuilding the home is covered by the insurance. It will most likely be too expensive to cover on your own. The replacement cost may be more than you might think. It may be tempting to go for insurance that is cheaper and covers the mortgage requirements, but you will want to make sure that the cost of rebuilding the home in case of any unfortunate event is covered by the policy.
- *Other Structures
*This is the part of the policy that provides coverage for the external structure that you may have on your property. This includes things such as fences, sheds, etc.
- Coverage for loss-of-use
If your home is the victim of an unfortunate event and becomes unusable, this type of coverage will cover the expenses of living in alternate housing while the home is being fixed. An average policy with coverage for loss-of-use will be worth 20% to 30% of the value of your home. The costs of living in alternate housing may easily be more if you live in a posh area.
This type of policy covers the cost of personal items getting damaged in the home due to an unfortunate event in your home.
To make sure you are getting the best policy possible, follow the tips listed below.
Homework
While it may be a necessity for your mortgage lender that you get some sort of home insurance, they cannot tell you a specific plan to go for. You should be prepared to do a lot of homework in this department to make sure that you are getting the most value for your money. You should ideally get quotes from at least three insurance companies before deciding on one.
There are a lot of tools available online that can help you get the quote. You might also have the option of getting discounts on certain insurance products through your employer or credit union. You should also make sure that the company that you are going for has a good rating online. There are tools available online that can tell you a lot about any particular insurance company to help you make the best decision possible.
Insurance Agents
Navigating the world of insurance can be a bit overwhelming to say the absolute least. It is a very specific industry that requires a lot of very specific knowledge. It would not be fair to expect just about anyone to know these things in detail or to even have the ability to digest all of the necessary information even if they are available. It would not be a bad idea at all to then consider getting an insurance agent involved on your behalf. These are certified professionals in the field with expert-level knowledge of the subject matter at hand. They can help you in ways that you might not even have expected from them. When negotiating with insurance providers, it will always help to get an insurance agent involved on your behalf.
Deductibles
Generally, if you pay more deductibles your insurance costs will be that much lower. In fact, it has been found that increasing the deductible by just $500 to $1000 can significantly lower the price of the premiums that you pay.
When deciding on a premium amount, things to consider include the cost of repairs or replacement if an unfortunate event falls on your shoulders. If you do not avail of small claims, this will also help with premiums not increasing.
Make use of discounts
Insurance companies are constantly making many types of discounts available. You should be privy to these discounts. Some of these discounts include discounts for paying the annual premium in full or for being on the policy for more than three months. The most attractive discounts which can go up to around 35% is the discount provided by the insurance companies for new construction owners. You can also get more discounts if you decide to get your home and auto insurance from the same provider.
You want to make sure that you are availing of all the discounts that you can get. Your agent can really help you in this department. A good insurance agent will know all about the current discounts and other benefits of the current insurance markets. You will also be qualified to get a lot more discount if you have recently installed home safety devices such as CCTV video cameras, smoke detectors, and fire extinguishers, which will reduce the chances of you filing damage claims.
Insurance shopping can be a bit overwhelming. There are a lot of good options available at a lot of different price points. Keeping track of everything might be a bit too hectic for a lot of us. If you have enlisted the help of an agent, your life will be that much easier. You and your agent will need to do a lot of work before you find the insurance plan that is perfectly suited to your needs.
