5 Things You Need to Know Before Buying Homeowner’s Insurance
Let’s face it. Insurance is complicated. Finding an affordable policy is difficult. Getting the right coverage is even harder. When you buy a home, there are so many different options and policies for homeowner’s insurance that it is downright confusing! Well, here are a few things that may help choosing the correct policy easier.
1. Do not confuse what you paid for your house with rebuilding costs. The land under your house is not at risk from theft, windstorm, fire and the other perils covered in your homeowner’s policy. Do not include its value when purchasing your homeowner’s insurance.
2. Raise Your Deductible. Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $1000. If you can afford to raise your deductible by even 1%, you will save even more. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail.
3. Improve your home security. You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 8 or 12 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems are not cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you can save on premiums.
4. 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 for unneeded coverage. If your five-year-old fur coat is no longer worth $5,000, reduce or cancel your floater (extra insurance for expensive individual items) and pocket the difference.
5. Make your home more disaster resistant. Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage. These do not just reduce your premium, but they also make your home a safer place to live.
BONUS: When you’re buying a home, consider the cost of homeowners insurance. You may pay less for insurance if you buy a house close to a fire hydrant or a professional (instead of volunteer) fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. A brick home is more wind resistant, so hurricane or tornado insurance might be cheaper. Choosing you home wisely could cut your premiums by 5 to 15 percent.
Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are considering. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have. If you have any questions about the best homeowner’s policy for you, just call us at 281-998-2500, or email us at firstname.lastname@example.org!