By Jeff Adolph
Residential Real Estate Insurance
When you own a home insurance is not only required by your lender, but also required even after you've paid off your mortgage -- which can really happen -- as it remains an integral part of your financial security. If you rent, insurance is still recommended, since your landlord's insurance, which covers the building, will not replace your belongings in the event of a disaster.
How much you pay for homeowners or renters insurance can vary widely -- sometimes by hundreds of dollars -- depending on the insurance company you use. How, then, can you find the best homeowner's insurance for you? Here are some tips to help you out.
Shop Around: Whether you use the internet or rely on the phone to track down your homeowners insurance quotes, it is imperative that you shop around, but be certain that you compare more than just the price. The company you chose should offer good coverage, excellent service and a fair price, and it may be worth it to pay a little more money if there's an agent you really "click" with, or who goes above and beyond normal duties.
Once you've found three or four companies you're willing to consider, ask them what steps they would take to reduce your cost. Only after these questions are answered to your satisfaction, should you ask for detailed quotes, and even then, you'll want to compare, to make sure coverage is equal.
Reducing Cost: In addition to asking your insurer how they can help you save money there are several things you can do to reduce the cost of homeowners insurance. They include:
· Increase your deductible -- the deductibles on homeowners insurance policies generally start at $250, but you can save up to 12% of the premium by increasing that to $500, and by doubling that to $1,000 you'll save up to 24%. If you're financially stable, and can afford a $5,000 deductible, you can reduce that premium by up to 37%.
· Bundle your policies -- many insurers sell auto and liability policies in addition to homeowners coverage. Adding one or both kinds of coverage with your existing insurance company can reduce your premium by 5 – 15%.
· Make insurance considerations part of the home buying process -- when you're shopping for a home, make sure you consider its insurability before you agree to a price. Special factors to consider are:
o Flooding -- if the house is in a flood zone, you have to budget up to $400 / year for special flood insurance.
o Distance to fire hydrants and fire stations -- the closer your home is to these services, the lower your premium will be.
o New or existing construction -- a new home could net you a discount of 8 – 15% from some insurers.
o Construction type -- depending on where you live, your home's construction could save you money. For example, on the west coast, frame houses are less expensive to insure, while on the east coast, brick tends to be more cost effective.
o Heating and plumbing -- you'll also want to find out how the home is heated (wood stoves require special riders in some states), and what the plumbing is like (septic costs more).
· Don't insure the land -- most insurers look only at the cost to replace your home, but it's always wise to be cautious, and make sure the value of the house and structures, and not the land, are the basis for the premium. After all, the land is not at risk from hazards such as fire, wind, theft, or other disasters.
· Invest in a security system -- most insurers discount premiums by 5% just for having a burglar alarm, dead bolts, or smoke detector, while others increase that discount to 15 or 20% if you have that alarm system monitored, or install a sprinkler system. Such systems can be expensive, however, and not every insurance company gives such discounts, so always ask about this before spending money.
· Stop smoking -- insurance companies often reduce premiums on non-smoking households.
· Ask about age-related benefits -- if you are retired, and at least fifty-five years old, you may qualify for a 10% discount on your homeowners insurance.
· Remain loyal-- many insurers give discounts of 5 – 10% to customers who retain their policies for several years.
While these tips apply to both new policies and existing coverage, one more thing to remember is that your insurance should adapt as your life changes. Since most insurance is renewable every year, it's a good idea to look at your coverage, and see where it might be altered as you progress through life.
Choosing the right homeowners insurance isn't difficult as long as you take the time to research the companies you're considering and ask questions throughout the process. There may be discounts you aren't getting because you didn't ask "do I qualify for anything else?"
-----------------------------------------------------------------
*RealQuestions RealAnswers*
Click on Comments below and share your thoughts and opinions, ask a real estate question or offer story suggestions...
-----------------------------------------------------------------
© 2006+ Jeff Adolph GayRealEstate USA
Proudly Sponsored By:
Recent Comments