Purchasing a home owner’s insurance policy is an essential part of securing a home loan. It can be confusing to understand how much coverage you need, and which company will best suit your needs. In this article, we will discuss some of the aspects of home owner’s insurance. We will also help to clarify some of the confusion, by providing a few user-friendly tips.
Most renters forgo renter’s insurance because they believe they are not at risk. If your rental home is damaged in a fire or flood, the structure itself will be covered by your landlord’s policy. Your clothes, electronics and other possessions, on the other hand, will not. You have to buy your own insurance policy to protect your things in case of flood, fire and theft.
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.
When you are going to purchase homeowners insurance there are certain things that you should look for in a policy. A good thing to have is guaranteed replacement value insurance. This means that no matter the cost your home will be rebuilt if a disaster were to happen. Most people think this is automatic, however, since home values increased it probably would cost more now than what you had originally paid for the home. This way you are covered.
Regardless of whether you’re at high risk or not, flood insurance could be a good idea. About one-quarter of the federal disaster claims made for flooding come from homes and residences outside of high-risk areas. Low-risk flood areas can also actually give you a discount.
Smoke Alarms
Smoke alarms can help you save on your homeowners insurance premiums. With installed smoke alarms, you can save around 10% or more on your annual homeowners insurance premiums. It is possible that if you add more smoke detectors, your insurance agent will further discount your policy. Don’t forget to tell your agent about your smoke alarms.
Installing alarm systems and tracking devices can greatly lower your premiums. Insurance companies are looking for people that have secure homes, and that’s why it’s cheaper to insure someone that has put these safeguards into place. Once installed, let your insurer know and your premiums will go down.
You can lower your insurance premiums by installing tracking devices and security systems. Your insurance company wants to make sure their investment is secure. As soon as you put in these security systems, inform your insurance company. They just might immediately decrease your premiums.
If you have any spare money in a savings account, use it to pay off your mortgage. When you own your home outright your annual home insurance premiums can drop dramatically as insurance companies tend to assume that home-owner’s are more likely to take care of and secure their property.
If you can, pay your mortgage off in full to cut the cost your home insurance premiums. A person who owns their home without a mortgage is viewed by insurance companies as being more likely to properly care for their home. This can lower the cost of your annual premium. The sooner you pay off your mortgage, the better. Upon doing so, immediately contact your agent to apply the new discounts.
When getting homeowners or renters insurance make sure you tell your insurance agent to add an addendum for flood and water damage. Most policies do not cover water damage unless it is added to the policy. Even if you don’t live in a flood zone, your home can suffer water damage from extreme weather and after a fire.
Making too many claims on your home owners policy can cause you to be ineligible for renewal. Chose the claims that you want to file carefully as it may cause you your policy if you file too many claims in a short period of time. If the cost of damages are close to the cost of your deductible, do not file the claim.
Changes within your specific neighborhood may lead to your premiums decreasing. Your rates can be lowered if you live near a fire station or have a fire hydrant within 100 feet of your home. Check out new developments in your area often, and report any changes.
Take the time once a year to review your policy and make comparisons with other home insurance companies. You may find that the company that gave you the best premium rate last year is going to cost you more for the following year. Do not hesitate to change to another reputable company if the price and coverage is right.
Guaranteed Replacement Cost
How much insurance coverage do you need? You don’t want to underestimate and find out that cheaper plans don’t cover your belongings if there is a tragedy. Your protection will increase as the cost increases too.
Select guaranteed replacement cost coverages on your home owner’s policy to make sure you are fully protected in case of damage or destruction. While coverage tied to the overall mortgage value or assessed value of the home may seem sufficient, often rebuilding a home costs more due to increases in construction and material costs. Making sure you have guaranteed replacement cost ensures your home is rebuilt should a disaster occur.
Purchasing a home owner’s policy is a necessity, especially if you will be financing your home purchase. The process can be confusing however, and navigating the insurance industry, sometimes proves difficult. In this article, we have provided you with a few tips that should help you in making your selection. Follow these tips to simplify the process of purchasing your next home owner’s insurance policy.
In order to save a lot of money on your homeowners insurance payment that you have to pay every month, increase your deductible. The issue with this is you’ll be covering small claims instead of the insurance provider. However if you have the financial ability to cover these smaller expenses, this is a smart move.