Many consumers search for a long time looking for insurance policies for health and car, but often don't think about comparing prices when insuring their home. Many times, new home owners accept the insurer recommended by their Realtor or lender, and current homeowners don't often consider shopping for a new company. But with a little bit of research, you could save hundreds of dollars a year on home owner's insurance.
You could save money even without switching companies by considering about the following:
Increasing Your Deductible
To reduce your monthly charge, think about carrying the highest deductible. The higher the deductible you pay, the lower the premium costs. You may even save up to 25% by increasing the deductible from $100 to $1,000. Always make sure you have enough available cash on hand to cover the larger deductible if you need it.
Improve Your Home Security
Most insurance companies will offer customers a discount if they have smoke detectors, dead bolts, fire extinguishers, burglar alarms, and for those in neighborhood watch areas and alarm systems that connect to a third-party monitoring system.
Consolidate Policies
Most insurance companies will offer multiple coverage discounts by using one company for all of your insurance needs.
Confirm Distance From Fire Stations
Your premiums will be higher if you live more than five miles from the nearest fire station and more than 1,000 feet from a fire hydrant.
Check for available record and renewal discounts
Is This a New Home?
See if new and renovated homes qualify for additional discounts. You may qualify for discounts if your home was built or rebuilt within the past 10-15 years.
Is Your Home Note Paid Off?
Ask your insurance agent if any additional discounts apply for mortgage-free homes. Some insurance companies offer up to a 5% discount when your mortgage is paid off.
Mortgage lenders always require borrowers to carry a home owner's insurance policy. But even people who own their homes outright should be covered by home owner's insurance. Typical homeowner policy covers loss or damage to the property as well as personal liability, which covers suits from injuries or illnesses related to the property. Losses under a homeowner's policy will be paid on either a cash value basis or replacement cost value. With the "actual cash value" method, the policy owner is entitled to the depreciated value of the damaged property. The older the item is, the less money you may receive for its replacement. Under the "replacement cost" coverage model, which typically costs more, the policy owner is reimbursed the amount it costs to actually replace lost or damaged items.
Common Coverage
The homeowner's policy is actually a group of policies that combines more than one type of insurance coverage. There are four basic types of coverage contained in a homeowner's policy:
1) Dwelling and Personal Property
2) Personal Liability
3) Medical Payments
4) Additional Living Expenses
How to Collect
All insurance companies operate under a conditional contract. This means that policy owners are responsible, in part, for loss recovery. In other words, if you have an insurance policy and suffer a loss, you must:
1) Notify the insurance carrier as soon as possible after a loss has occurred
2) Protect the property from further damage by making repairs to prevent further damage
3) List personal items damaged, including descriptions, actual value, and replacement cost
4) Be prepared to show an insurance company representative the claimed damage
5) Complete a statement for the insurance company, explaining circumstances surrounding the loss
