Save More Money on Your Home Insurance Rates
Home and net worth seem to be synonymous. A house is the largest purchase most people will ever make. It is both an asset and a liability. The devastated real estate market makes home insurance more important than ever. This kind of insurance protects against the loss of your house and personal property. Different policies guard against varieties of risks or perils. To an insurance company, a multitude of risks surround a house. Fire, theft, weather damage, volcanic eruption, riots and other perils are all calculated in a policy.
Since home insurance protects possessions and the home, taking inventory before buying a policy is essential. You have to know the exact value of every insurable item in your home. Over and above personal property, the attributes of the home itself are also important. Building materials used in construction, the year the home was built, location, the total square footage and distance from a fire hydrant are all taken into account.
Only Insure Replacement Costs
You can still save money even with some of these factors working against you. The first way is to purchase enough coverage to rebuild the house. A common mistake is to buy a coverage amount equal to the price of the home. The problem is the price includes the price of the land. Once the home is purchased, all that matters is the replacement cost. Insuring the replacement of a home is much cheaper than also insuring the land.
Disaster Proof Your Home
There are no ways to prevent certain disasters. Depending on the location of the home, proving that losses will be lower after an emergency can reduce your premiums significantly. For example, reinforcing the foundation in areas prone to earthquakes will help reassure the insurer. Making the home stronger so that the likelihood of damages from a tornado or hurricane are less will also reduce home insurance premiums.
Update Major Systems
The condition of a house directly influences the price of insurance. Updating the heating or electrical systems lowers the risk of a potential claim. The newer these systems are, the higher the premium discount. Replacing old plumbing also mitigates risk. Thousands of dollars worth of damages can be incurred from one ruptured pipe; even a small leak, over time, can wreak havoc on a house.
Review Your Home Insurance Policy
Be sure to go over your policy with your agent every year. Your possessions will likely have gone down in value. For example, a television purchased for $3,000 a year ago may only be worth $1,000. Even small decreases with multiple items and will lower your home insurance premium. Doing this review in person will give you an added boost. Your agent will have a chance to inform you of any additional discounts that may apply.
Bundle Policies
Taking out car and home insurance policies from the same company makes you eligible for a discount. Premiums for both policies are reduced. Some companies allow life insurance policies to be combined with home and automobile coverage as well, reducing your premium even more.
Raise Your Deductible
The simplest way to lower your premiums is to accept a higher deductible. You shoulder more of the risk and the insurance company requires less money from you. The downside is you need to be comfortable with paying more out of pocket.
