Before You Buy Homeowner’s Insurance, Read This
Buying a home can be overwhelming. Between calculating your insurance, mortgage, taxes, and other fees, things can get complicated and expensive. Good news Texan is here to help! Let us get you up to speed on the things you need to know before buying home insurance.
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.
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(monthly payment). 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.
Improve your home security.
You can usually get discounts of at least 5% for a smoke detector, burglar alarm, or dead-bolt locks. Some companies offer to cut your premium by as much as 8-12% 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 a system, find out what kind your insurer recommends, how much the device would cost, and how much you can save on your premium.
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 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.
Make your home more disaster-resistant.
Find out from your insurance agent 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. Also, 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.
Consider homeowners’ insurance costs when you’re searching for a home.
You may pay less for insurance if you buy a house close to a fire hydrant or a professional (instead of a 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 your home wisely could cut your premiums by 5 to 15%.
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. You can receive your free clue report every 12 months here.
We’re here to help you protect what matters. Call Texan if you have any questions about the best homeowner’s policy for you!