Homeowners insurance is an aspect of home ownership that many do not always account for in projecting their budgets. It is also an area of tremendous mystery, as it is more complex and involved than basic auto insurance. Read this article to shed some light into this area of your life.
It’s important to know how you’ll be covered if you have to live outside your home after it’s damaged or being rebuilt. Some insurance policies will cover expenses incurred if you are forced to live elsewhere due to damage to your home. However, you must fully document these expenses so that you can obtain your settlement.
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.
When considering insurance for your home, be sure to sign up with a deal that has a guaranteed replacement value clause written into it. This will ensure that your house will be covered no matter what the cost of materials and labor currently are. This helps if you are in an area that has seen and will see an increase in construction costs and property value.
Take the time to inventory your home’s valuables by taking photos of these items, you’ll be glad you did if you ever need to make a claim. This may appear to be too much work, however in the case of your property being lost or destroyed, they will make it much easier to make a claim for their replacement value.
Flood Insurance
You may think you don’t live close enough to a body of water to have to worry about flood insurance…but think again. Before you decide you don’t need it, assess the flood risk for your geographical area. You will be surprised at the unexpected parts of the country which have experienced floods in the past year or two, and if you live in or near on of these areas, flood insurance may be right for you. FEMA.gov is one site that provides information on flood risks for all parts of the U.S.
If you have a rommmate or two, find out what your policy says about what is covered in a disaster. There are policies that cover everything on site, and there are other policies that only protect your belongings. If you don’t want to pay for your roommate’s belongings out of your own pocket, you need to check this out ahead of time.
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.
Lower homeowner insurance premiums with a security system. Be sure to choose a system that is monitored from a central location. This gives proof that your home carries a lower risk and allows the insurance company to give you a discount, sometimes of 5 percent or more. Be sure to keep all security system paperwork, as you may be required to provide copies to your insurance company.
Install a security system that’s centrally monitored. It doesn’t just help your safety; it can also get you a sizable discount on your insurance. You have to send proof of monitoring to the insurer to get this discount.
Putting an addition onto your home will increase your homeowner’s insurance rates because there’s now more home to insure. Minimize the increase by being smart with your building choices. If you can arrange for steel-framed construction, you may be able to pay less by choosing this less-flammable material. Consider the new roof’s fire rating as well.
Get an estimate of damages to your home prior to filing a claim on your home owners insurance. If it is not going to cost you much more than the deductible to repair, do not file the claim. Each claim that you file will cause your premium to increase for the year.
If you own something of value, make sure you make a note of them in the policy or put them on through an endorsement. If you have jewelry, furs or expensive electronics, you’re going to have to list them separately, since your basic policy only covers your general property. If you do not have sufficient coverage to replace valuable items, ask your insurer how to list things individually so that they are covered fully.
Yearly Premiums
Increase the deductible on your home insurance to enjoy lower yearly premiums. While this means you are likely responsible for small claims that cover things such as a broken window or a damaged section of flooring from a broken pipe, these repairs are generally only a few hundred dollars. You will save far more than that on your yearly premiums and come out of the deal with more money in your pocket.
You may want to check into increasing liability limits on your homeowner’s insurance. This prevents damages from claims of injury on your property. For example, if your child damages a neighbor’s home by accident, the liability coverage on your own policy often covers the claim.
Earlier in this article, the complexity of homeowners insurance was alluded to. Now that you have read this piece, you should be more familiar with what homeowners insurance covers and how you should account for it in your life. Keep these tips in mind in the coming days, and you can make this a very successful area for yourself.