Since I let you in on the secrets of saving on Car Insurance, thought it would be only fair to come clean with Top Ten Best Practices to Save on Home Insurance as well. Like I said before, your house is the biggest investment in your life. You gather your savings and take the big step of buying your own home!
It is a dream come true for you! A dream that is so beautiful and precious that you do not want any disaster to befall upon it. You decide to seek insurance protection from any unknown and unforeseen losses that come your way and your house in future years.
Let’s take a look at the ten pointers that I, as your Friendly Insurance Advisor complied for you while purchasing the house and getting it insured for affordable rates.
1. Be mindful of the location you are purchasing the house. Is it a new area? Old area? How is the neighborhood? Is it safe? Are there frequent vandalism tendencies exhibited and the like… You would be able to get this sort of data either from your real estate agent or the people who are presently living in the premises. Believe it or not, this is kind of information that the Insurance Companies use to base their rates on. If the reports are good, then the premium will be cheap and if it is not favorable- like say high frequencyof vandalism and theft, and older houses- more claims due to structural defects, greatly steer the premium into the high side.
2. Doing inspections before purchasing the house is always a good idea to get to know more about the physical structure. This would be helpful in case of older houses. Sometimes, when I ask clients about the type of wiring or plumbing they have at home, they would say to me, “I don’t know. Am I supposed to know that?” And let me tell you, Yes- you ARE to know about it. For example, if you have a knob and tube wiring at home, chances are I might not be able to insure you or I might only provide you with minimal coverage but still with higher premium. This would be considered as a high risk home according to my underwriting principles. On the bright side, let’s say that you have a brand new roof, your premium will be cheaper because chances are less that you suffer a roof damage loss after a weather disaster.
3. Finally, after much deliberation, you indeed bought your dream home and took care of every detail that comes as part of it including buying insurance. You are quite happy with the rates you received from your Agent. Now the journey begins! You are to make sure that your rates stay reasonable and your loss/claim history remain clean. The first step into this, if you ask? Protect your home well, for starters. Install security alarm system if you haven’t already. You will be eligible to get discounts from certain companies if you do this and plus, you are shooing away all those possible theft loss situations you might succumb to in future.
4. Every policy comes with a deductible. Sometimes, it is $500 or it could be $1000 or more. If you suffer a loss event and the estimated cost to fix the damage falls below the deductible amount, don’t bother to claim it. Fix it yourself and continue enjoying your good loss history. Counts towards enjoying cheap premium!
5. Speaking of Deductibles, another way to save on home insurance is to take on a higher deductible, especially if you have a good claims history. Higher deductible will lower the premium, so it is worth a shot as well.
6. When we talked about Car Insurance, I told you its not all about saving money, it is also about protecting your valuables well. So, sometimes, you need to pay more to get that extra protection. For example, you have expensive jewelry that you keep at home and you have it even appraised due to the worth of it. Go ahead and insure it for its full worth so that if you lose it in future, we are there to protect you from such an unfortunate incident. The reason why I said this is because normally, your basic/comprehensive home owners’ policy limits the coverage on your valuables for whatever reason. If that applies in your case, insuring the valuables for its full worth will benefit you in a claim scenario.
7. Also, be careful when it comes to payments. Don’t fall behind in payments and take the risk of your policy getting cancelled for Non Pay. Some companies have pretty strict regulations when it comes to Non payment for home insurance and once that happens in your case, you won’t be eligible to get insurance with them for several years. Plus, you always have to disclose this fact to any new company that you are going to and thus open the ‘can of worms’. This will also lead to higher premiums as well.
8. When you shop around, always switch companies at your renewal. If you try to cancel policies mid term, you might be charged a penalty with some companies. So, it is a good idea to find out about their cancellation methods when you initiate the policy with them in the beginning.
9. Similar to car insurance, take time to study your policy. Only purchase the coverage that you need and pay for it. If you do not read your policy or is unaware of what you have, chances are you might be over paying and the Insurance Company might be over charging for the risk
10. After everything said and done, along with studying and getting to know your policy, please also talk with your agent on how to save more on your home insurance. This is the time to validate all those discounts you are presently getting and the ones you are eligible to get but do not have. Some of the examples would be the Seniors Discount, Retiree Discount, Student Discount, Snow Tire Discount- to name a few. Not all companies offer them; it is based on the discretion of an individual Insurance Company.
Did you find these techniques useful? Want to add anything more that had worked for you in saving on insurance in the past? Please share