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Tips on Homeowner Insurance
Homeowners' insurance isn't a luxury, it's a necessity. In fact, most mortgage companies will not make a loan or finance a residential real estate transaction unless the buyer provides proof of coverage.
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Here are six ways to make sure you get the.jpeg)
right coverage and consequent compensation for your home:
Maintain a Security System and Smoke Alarms:
A burglar alarm that is monitored by a central station, or that is tied directly to a local police station, will help lower the homeowner's annual premiums, perhaps by 5% or more. In order to obtain the discount, the homeowner must typically provide proof of central monitoring in the form of a bill or a contract to the insurance company.
Smoke alarms are also important. While standard in most modern houses, installing them in older homes can save the homeowner 10% or more in annual premiums. Of course, even more importantly, in case of fire, they could save your life!
Raise Your Deductible:
Like health insurance or car insurance, the higher the deductible the homeowner chooses, the lower the annual premiums. However, the problem with selecting a high deductible is that smaller claims/problems such as broken windows or damaged sheetrock from a leaky pipe, which will typically cost only a few hundred dollars to fix, will most likely be absorbed by the homeowner.
Look for Multiple Policy Discounts:
Many insurance companies give a discount of 10% or more to their customers that maintain other insurance contracts under the same roof (such as auto or health insurance). Consider obtaining a quote for other types of insurance from the same company that provides your homeowners' insurance. You may end up saving on two annual policy premiums.
Plan Ahead for Construction:
If the homeowner plans to build an addition to the home or another structure adjacent to the home, he or she should consider the materials that will be used. Typically, wood-framed structures (because they are highly flammable) will cost more to insure. Conversely, cement or steel-framed structures will cost less because it is less likely to succumb to fire or adverse weather conditions.
Another thing that most homeowners should, but often don't, consider is the insurance costs associated with building a swimming pool. In fact, items such as pools and/or other potentially injurious devices (like trampolines) can drive annual homeowners' insurance costs up by 10% or more. This may seem like a small price to pay given the joy these items bring, but it is still something that should be considered by the homeowner prior to purchase or construction.
Pay Off Your Mortgage:
Obviously this is easier said than done, but homeowners that pay off their mortgage debts will most likely see their premiums drop. Why? The simple reason is that the insurance company figures that if you own the home outright, you'll take better care of it.
Make Regular Policy Reviews and Comparisons:
Investors should compare the costs of other insurance policies to their own at least once per year. In addition, they should review their existing policy and make note of any changes that may have occurred that could lower their premiums.
Source: http://www.investopedia.com/articles/pf/07/homeowners_insurance.asp
June 9, 2009
