Obtaining insurance for your home can be a daunting challenge. With so many clauses, contingencies and contracts, not to mention the magnitude of what is at stake for you, it is simply overwhelming. Read on to learn how to navigate your way through the maze of homeowners insurance and be able to make your decision based on knowledge and facts with complete confidence.
The faster you pay off your mortgage, the more money you can save on your home insurance. Insurers often believe that someone who owns a home outright will be more diligent in their care of it. By paying off your mortgage, your annual insurance premiums will decrease.
Have your financial house in order before you try and enter into a real estate transaction. Check your credit report and credit score from the three major credit bureaus. If there are any inaccuracies, you will want to have those fixed. Unexpected hiccups in your financing can derail a purchase you are about to make.
To lower the annual insurance premiums on your home, increase your deductible amount. Although this means that minor claims such as leaky pipes, broken windows or the like will not be covered, these types of damage typically only cost a couple hundred dollars to repair, which will be less than you save.
When you comparison shop for homeowner’s insurance, make sure you let insurers know you have installed a security system at your house. A security service and system for your home that is monitored remotely can effectively reduce your insurance premiums by 5% or more monthly.
Be aware of what your home insurance actually covers. A regular home insurance policy doesn’t cover things such as flood damage. This type of insurance needs to be purchased separately through the Federal Emergency Management Agency. Another thing to consider is earthquake damage. If this is something that you may experience, you will have to buy specialized coverage from a private home insurance company. Luckily, both of these types of coverage are relatively inexpensive.
Guaranteed Replacement
There are many things homeowners can do to reduce their premiums. For example, framing an addition using either steel or concrete will decrease your insurance premiums; while framing using wood may increase them.
When shopping for homeowner’s insurance, be sure to get a policy that offers guaranteed replacement value insurance. This means that your policy will definitely rebuild your house if it were completely destroyed. As construction costs increase over time, it may cost more to build your house now than it did when your home was new. Guaranteed replacement policies absorb these costs.
When considering insurance for your home, it may be beneficial to have an alarm system installed. Not only will this be beneficial for your own safety, but your insurance rates will reflect the added security as well. After providing proof that your system is monitored by an agency, you may qualify for up to 5% off your rates.
Turning 55 is a great reminder to start looking for a new home owner’s insurance policy, or reviewing your current policy. A lot of companies offer senior discounts, even at the age of 55. If your company doesn’t offer this discount, take the time to shop around.
Having a home security system installed, especially one that has a monthly monitoring system against burglary, can seriously reduce a homeowners insurance premiums. The cost of your system can be partially recouped in the monthly or yearly savings you will make, and of course, you will have peace of mind. It can also mean that you will feel safer when you are at home.
What would do you do if your home was destroyed in a natural disaster and needs to be rebuilt? If you purchased your homeowner’s insurance years ago, the cost of construction and materials may have gone up. For this reason it is important to make sure you buy a Guaranteed Replacement Value Insurance premium which will guarantee that your home will be rebuilt regardless of the cost.
Pay your mortgage as quickly as possible to benefit from lower premiums. Insurance companies are more trusting of people who own their homes, believing they will take better care of it. Using this belief, most companies offer lower annual premiums. Once your mortgage is fully paid, contact your agent to find out what savings you qualify for.
You can save thousands of dollars and years of payments by making your mortgage payment on a bi-weekly basis, instead of monthly. Ask your mortgage holder about setting you up on this payment program. Since there are 52 weeks in a year, you will end up making an additional couple of payments without breaking the bank or your budget.
Hopefully you are now well prepared to take on the challenges of finding the right homeowners policy for you and your needs. Arming yourself with knowledge is always the best approach and insurance is no different. Keep a little notepad handy as you endeavor your selection and shop around for the best policy. Hold every company and what they offer up to a standard of excellence that serve your needs as a home owner best.
Think about insurance when you are planning a home addition. A simple choice of concrete as a building material, for example, can lower premiums with certain insurance companies in regions throughout the country. Because certain materials are more resistant to damage from storms or fire, the insurance company is more willing to reduce the cost to insure it.