There is no doubt that buying a house is a very exciting time but there are a lot of details that have to be considered when you are buying a home. One of those things that a lot of people do not evaluate close enough is home insurance.
Home insurance is one of the most important things to consider when you are buying a new home. The right moves can help you to save hundreds of dollars every year. Being familiar with your insurance policy is a very important part of being a home owner.
A homeowners policy is an insurance policy that provides protection for the property, just in case the property is damaged or if someone is injured on your property and decides to make you liable. It is a requirement for most mortgage companies that you have a homeowner’s insurance policy in place and that you keep it in place for as long as you have the mortgage.
If you have not really given your homeowners insurance much thought you are not alone. It is estimated that around 52% of homeowners do not really have a good understanding of their homeowner’s policy. They likely understand homeowner’s insurance cost because they are paying the bill but they are not clear on what type of coverage they have and what it covers.
If you are a new homeowner one of the first things you want to do is to get familiar with your homeowner’s insurance plan. Home insurance typically will cover the structure against fire, theft, and damage caused by a natural disaster, but in the same vein, most homeowners plans do not cover flooding from a natural disaster.
It is the details that really make a difference when it comes to your coverage. Generally understanding homeowner’s insurance cost and what you are really paying for, is not enough. Pull out your policy and read it from cover to cover, or have your agent give you a breakdown of what your insurance will cover.
Getting familiar with your homeowner’s insurance will help you to better understand what your homeowners insurance cost is paying for. Once you have evaluated your plan, you can follow some tips to keep your homeowners insurance cost down.
One of the best ways to keep your homeowner insurance cost down is to connect with a trusted insurance agent. An insurance agent can take a lot of the leg work out of finding great affordable plans. Agents are highly skilled at finding great deals with reliable carriers.
Following a few simple steps will ensure that you can reduce homeowners insurance cost and more importantly have the coverage that you need to have the peace of mind that you want. The right insurance plan at the right price will help you to rest easy knowing that your property is protected.
Do These Things
It is important that you are always on the up and up with your insurance provider. That means that if you have done a home remodel to make sure you take pictures and let the insurance company know. It is important that the insurance company has a record of any major changes you make to your property to adjust the coverage to reflect the changes.
A lot of homeowners make the mistake of thinking that it is easier to just not tell the insurance company about their above ground pool installation. This can be a critical mistake. If something happens with the pool and you forget to tell your insurance carrier, then you may find that you are not covered.
Whether it is first floor renovations or whole home renovations make a note to call the insurance company and share the upgrades. It can make a difference if you ever have to file a claim.
Other do’s to keep homeowners insurance cost down include:
- Make sure you keep up on the maintenance of your property. For example, replacing your water heater before it gives out can save you a lot of stress and reduce the risk of damage.
- Any time that you are having work done around your property be sure only to contract with fully insured contractors. This single step can help to protect you and your insurance company.
- Get rid of the dangers around your house. For example, if you have a tree limb hanging, it is a lot better to cut it down before it falls and you wind up with a damaged roof.
You can earn savings from your home insurance by keeping up with maintenance (which will reduce the number of claims you have to put in) and remove dangers from your home. Being forthright with your insurance company, even when it may mean an increase in premium ( like that above ground pool) is always the best policy.
Don’t Do These Things
There are a few things you should avoid if you want to keep costs down when it comes to homeowners insurance cost. For example, little things like residential painting are not going to change your premium, but the bigger things like hiring roofers that are not certified that leave your roof unable to protect your property, that should be avoided.
Sometimes it is not what you do, do that can save your money on your homeowners insurance cost but it is the things that you don’t do that can save you some money like:
- Don’t have a wood stove for heat. If you have a wood stove, remove it, and use a source that is not considered a fire hazard by the insurance company.
- Don’t cut corners when you are hiring a contractor for electrical work, plumbing work, or any other code requirements. Risking your real estate to an incompetent vendor can turn out badly for you, and it is always nice to pull out proof of certification for your insurance company if they ask for it.
- Don’t file a claim on your insurance if the damage is not beyond what your deductible is. Filing claims can cause your insurance premium to rise.
Of course, don’t forget to list things that are valuable to you as property in your home. The insurance company may ask you to list your valuables as part of your coverage. You want to make sure that you give them a complete list. For example, you should include all types of electronics, jewelry, art and collections, and other items that you want to be protected.
If there is a fire or your house is damaged by a natural disaster and you forgot to list your mother’s engagement ring, you will not get paid out for that ring if it cannot be found. Jot down serial numbers of electronics, and any evidence that you have of what a collection is valued at.
This information is good to have on hand anyway just in case something does happen and you need to be able to identify your goods. Don’t undersell your valuables. List them all. If you have an unusual collection like a button collection from the revolutionary war, you should get an appraisal report to submit with the insurance paperwork.
Be wary of how many claims you file. Evaluate the situation to see if it is better to pay for the repairs on your own then going through the insurance company. For example, if you have roof damage that comes to about $650 in repairs, and your deductible is $500, should you really initiate a claim for the $150? Probably not.
When it comes time to renew your policy the insurance companies do consider whether you have filed a claim or not. Filing small claims can put a dent in your homeowners insurance cost. It is better to cover those smaller repairs and first floor renovations on your own.
Keep Good Records
New homeowners can really start off on the right foot with the insurance company and with all the other companies they do business with by starting out organized and staying organized. Get a file cabinet or a file box, and make sure all your home-related documents go in that box.
Keeping homeowners insurance cost down starts with you being organized. Keeping all your records in one place can help you to find whatever you need quickly for a claim and can help you stay on top of the insurance company. When you are organized you will never miss an opportunity to take advantage of a discount.
Ask For Discounts
There is no shame in negotiating with your insurance company to get a better deal on your premium. You never know you may be missing out on some great savings simply because you are not aware of the savings that are you eligible form.
Insurance companies often offer savings for :
- Clubs, organizations, and other groups.
- First responders, teachers, military, government workers and other professions.
- Seniors and more.
You never know, you may already be eligible for a discount just based on your profession or for being a member of a civic group or a union. The only way you will know is if you ask. While you have your insurance company on the phone ask them about loyalty discounts.
Some carriers offer loyalty discounts to clients that have had a policy for a few years or more. It is not something that is typically advertised but if you ask you may find out that you are missing out on this type of discount as well.
The point is you really do not know what type of savings you may be eligible for until you do the research. Don’t just accept what the insurance company has to offer without diving in and asking for discounts.
Referral Programs, Bundling, and Higher Deductibles
Other programs that might offer a discount to help keep homeowners cost down are referral programs, like referring your neighbor or family member to the insurance company and when they sign you get a discount. This is a rarity but nothing ventured is nothing gained. Ask, the worst that can happen is you hear “no”.
Bundling all your insurance needs under one carrier can really help you to save across the board. Bundling your auto insurance and home insurance can help you to save on both policies. Plus, it makes it easier when you have just one insurance company to deal with for all your needs.
Choosing a higher deductible can help you to drive down the costs of your premiums. Of course, this only works if you have enough money in the bank to pay the higher deductible if you need to. The higher the deductible the lower the premium, however, this is not the best way to save on premiums.
If you take the higher deductible route, if something claim worthy does occur, you will have to shell out more out of pocket before the insurance will cover the claim. You have to weigh this option carefully.
Making sure you are able to keep homeowners insurance cost down starts with really getting to know your insurance policy and being diligent about managing your homeowners policy. There are a lot of things to worry about when it comes to real estate and it can get hard to keep up with everything, but do not let your insurance slip through the cracks.
Staying on top of your homeowners insurance cost, understanding your policy, and grabbing those discounts when you can, will make your policy more affordable and of course, make sure your property is fully protected.