Are You Paying Too Much in Homeowners Insurance?
Although recently conducted research showed that 59 percent of homeowners are underinsured, many homeowners are paying too much in premiums for their homeowners insurance policy. Making sure you have adequate coverage while not bleeding money in insurance premiums is a fine line to walk, and few have done it with success.
Getting the Sufficient Coverage
Conducting a thorough appraisal of your home and its contents; informing your insurance agent of any recent add-ons or remodeling jobs; and accounting for an average 7 percent increase in cost of labor and building materials per year are great places to start to ensure you have adequate coverage. While the optimal scenario is having an insurance agent visit your home to expertly assess the cost of replacing your home, you can conduct an appraisal yourself. There is a program currently used by most insurance companies that you can access online at accucoverage.com. Input information, and the program will calculate the estimated cost of replacing your home.
Curbing the Cost of Premiums
Homeowners insurance can be costly, but there are several ways to bring the cost of premiums down, including the following:
• Maintaining good credit history.
• Adding storm shutters (especially important if you live in hurricane-prone areas).
• Reinforcing your roof with h3er roofing materials.
• Installing new smoke detectors on every level of your house, and inside and outside sleeping areas.
• Having an alarm system installed.
Certain characteristics of your home affect the cost of home insurance premiums. For example, if your home is older or you reside in “earthquake country,” your premium is more expensive. Conversely, if your home is located close to a fire hydrant, your premium should be cheaper. If the electrical and plumbing systems in your home are no more than 10 years old, again, you are likely to pay less.
Discounts
Most companies reward you for purchasing a home insurance policy and auto insurance policy from the same insurer. Likewise, many insurance companies reward you for being a long-term policyholder (typically 5 years or more). If you are retired (or over 55), you are looking at potential discounts of up to 10% because you are at home more often than working people and are therefore more likely to deter burglaries and detect fires sooner.
The key to paying the right amount for the most appropriate coverage is educating yourself—read your policy thoroughly and don’t be afraid to ask your insurance agent questions. Do some sleuthing—you may find significantly lower rates for the same coverage elsewhere. With just a little work, you can obtain sufficient coverage for an affordable price.