Insurance tips for homeowners. How much is home insurance ?
Home warranty insurance isn’t a luxury, it’s a necessity. In fact, most mortgage companies won’t make a loan or finance a residential real estate transaction unless the buyer provides proof of coverage for the full or fair value of the property (most of the time this is the purchase price). In this article, we’ll show you some simple actions you can take to make sure your insurance home is sufficient for your needs.
New home insurance can be very expensive. Those that live in high risk areas such as close to major waterways, known earthquake fault lines or other high claims areas will pay the most for coverage. In fact, those in high risk areas are often forced to pay annual premiums in the many thousands of dollars. But even homeowners in relatively sedate, suburban neighborhoods (with property values around the national average of $210,000) could pay between $500 and $1,000 a year for a basic home insurance coverage policy.
The good news is that although you can’t (and shouldn’t) avoid purchasing vacant home insurance, there are ways to minimize the cost.
What does home insurance cover ?
Here are six ways to make sure you get the right home insurance building 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 unoccupied home insurance 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 home insurance providers.
Smoke alarms are another biggie. 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 home insurance claims / problems such as broken windows or damaged sheetrock from a leaky pipe, which typically will 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 and a cheaper home insurance.
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 and check for manufactured home insurance. 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 home contents insurance policy reviews and comparisons : investors should, at least once per year, compare the costs of other insurance for home policies to their own. In addition, they should review their existing policy and make note of any changes that might have occurred that could give discount home insurance.
For example, perhaps the homeowner has disassembled the trampoline, paid off the mortgage, installed a burglar alarm or installed a sophisticated sprinkler system inside his or her home. If this is the case, simply notifying the insurance company of the change(s) and providing proofs in the form of pictures and / or receipts could significantly lower home insurances premiums.
Look for changes in the neighborhood that could reduce the insurance for homes rates as well. For example, the installation of a fire hydrant within 100 feet of the home, or the erection of a fire substation within close proximity to the property may lower the homeowner’s annual premiums.
Homeowners insurance is a necessity. There are ways to save money, but there are also some features that homeowners shouldn’t skimp on. Make sure you know the difference.