My 4-week series on How to Protect Your Home and Help You Save Money Series is a must for every homeowner. Once you buy a home, it’s now your responsibility to protect and maintain it. This week is a great overview of what you need to know when it comes to homeowner’s insurance, keeping your home safe and secure, and avoiding costly mistakes when protecting your home.
First, don’t just “rubber stamp” your homeowner’s insurance policy when it’s time to renew! How you live in your home and what possessions you own can change from year to year. It’s always a good idea to reassess your needs and consider any changes in your home that could affect your insurance rates and coverage.
Before you sign off on that annual renewal, make sure you are fully covered for your current situation but also see where you can save money. You might be able to take any savings and put it toward additional coverage you need now.
You may qualify for certain credits that could lower your premium, but you’ll still get the coverage you need. As always, please talk to your insurance agent for more details. Here are 14 quick tips every homeowner should know about:
Shop around. Quotes on homeowner’s insurance can vary by hundreds of dollars for the same coverage on the same home. Get at least three quotes and make sure each insurer is offering the same coverage. It’s not always apples to apples. And that includes shopping with your current insurer — sometimes you can even save money by buying a completely new policy with them.
Buy home and auto policies from the same insurer. Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.
Raise your deductible. If you can afford to raise your deductible from $500 to $1000 you may save as much as 25% on your annual premium. Avoid making claims under $1,000 so that your rates don’t rise. But, just remember you’ll pay more out of pocket if you ever need to make a claim. Consider setting aside the $1000 (or whatever you choose for your deductible) in a separate savings account so it’s there when you need it to pay for a claim.
Improve your home’s security and safety. Install a smoke detector, burglar alarm or dead-bolt locks and you may save at least 5 percent. Some companies may cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that alerts the police, fire department, or other monitoring stations.
These systems aren’t cheap and not every system qualifies for a discount, so check with your insurer first. Even Smart Home devices, such as a programmable thermostat, could be considered for a discount since it could help prevent frozen pipes. Ask your agent about any products or services that may qualify.
Maintain a good credit record. Insurers are increasingly using credit information to price homeowner insurance policies. In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information.
Stay with the same insurer. If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more.
BUT … don’t get lulled into thinking it’s always a good deal so you should periodically compare this price with that of other insurers (and remember even shop for a new policy with your current insurer!)
Review the limits in your policy and the value of your possessions at least once a year. You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money on coverage you don’t need anymore. Some items depreciate over time so review your policy annually, so you don’t have too much coverage.
Don’t forget to review the riders on any special items such as jewelry, artwork, electronics, or other high-dollar items.
Look into group membership discounts. Are you an AAA member, in the military or belong to an alumni organization? You may be eligible for membership discounts with your insurance company. It’s worth asking about any discounts when renewing. It can be a benefit of being a member of a professional group, a trade organization, or a non-profit association.
Upgrade older features in your home. If you have an older home update your plumbing, electrical, heating and/or air conditioning systems to prevent fire or unwanted leaks. You’ll be less risky and can reduce your rates. Don’t forget to talk to your agent to find out if there are other upgrades you should consider.
Look into water and gas leak sensors. Insurance companies may lower your bill because these devices help prevent claims since you’ll know there’s a problem before there’s major damage. This new generation of home sensors can alert you if there is moisture or a gas leak in your home and many can be self-installed. Active water detectors can even shut off the water source!
Don’t insure the land. Homes can be damaged in fires, floods, and other mishaps, but there’s not much that can go wrong with land. Purchase enough insurance to cover the value of your home and let the land take care of itself.
Give up smoking. Insurance costs more for smokers because of an increased risk of fire-related claims. If you smoke and are serious about lowering your bill, consider quitting. If you were a smoker when you took out the policy but have recently quit let your insurer know.
Reconsider a pool or hot tub. These may or may not impact your premium depending on where you live so talk to your agent before you get one. If you already have one, discuss the measures necessary to decrease any risk.
Check on dog breed & obedience training. Certain breeds will either cause your insurance company to cancel coverage or increase your insurance rate. So you might want to find out which breeds affect insurance rates before you get a dog. If you already have a dog that is causing a higher insurance rate, be sure to check with other carriers for reduced rate options. Also, check to see if your dog attends obedience training if it can help lower your rate.
Last but not least, I’m always here to help, but this article should not be taken as insurance advice in any way. Please talk to your licensed insurance agent to make sure you have the right coverage for your particular needs. Think of using this article as a guide to help your conversation with them so they can help you make the right choices.
Stay tuned for the next article in this serious to help you Protect Your Home and Help You Save Money Series.
I'm Nancy and I love helping homeowners who have outgrown their current home and are ready to buy a new home but don’t know where to start. Let me know how I can help you make your real estate dreams come true.
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