Posted On 20 Aug 2019
1. Higher Deductible = Lower Premium
The deductible is what you must pay first before the insurance company will begin paying. A $1,000 deductible means you pay $1,000, and then your insurance will start paying. If the damage costs $5,000, you pay $1,000 and the insurance company pays the rest: $4,000. It may seem like a “no-brainer” to choose a lower deductible except it actually saves you money in the long run to have a higher deductible. A high deductible means your premium, or policy price, is lower per year. Just make sure you have enough money set aside to pay a deductible if something happens.
2. Combine Your Policies With One Company
Using one insurance agency for your homeowners, auto, life and other types of insurance you may need, will save you money. As a driver, you are required by law to have auto insurance. If your car insurance is with a different company than your homeowners insurance, speak to your agent about moving all of your insurance policies to their company. Also, if you have had one insurance company for many years and are pleased with their service, keep that company. The longer you are with one company, the more money you’ll save, plus you’ll be treated better.
3. Protective Device Discounts
Smoke detectors, fire extinguishers and deadbolt locks are usually worth discounts of at least 5%. Local fire and burglar alarms, and sometimes a gated community, receive discounts of 5% to 10%. You can get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company.
However, not all of these systems qualify for discounts. Before you install one, check with your insurance agent to find out which systems qualify you for a discount and how much you would save on your premium if you installed the system.
4. Make an inventory of your Belongings
Make a list of all of your belongings. Start with one room and write down the name and the price of each item. Use a digital camera to take pictures or videos and keep this visual record on a disk or jump drive in a safe deposit box so you’ll have visual proof to match your list. Every year, look over your policy and check the coverage you have for your valuables. If you purchase and expensive item, you may need to increase your limits of coverage. With a visual record you can very easily add new photos of new items and delete the photos of items you have sold. Pay particular attention to items that have limitations on the amount, such as jewelry and valuable art. You would need to add endorsements or “floaters” to your policy to insure such items for their maximum worth. Your agent will have a complete list of these.
5. Location IS important
Where you live and what material was used to make your home? If you live in the Eastern United States, it’s better to have a brick or stone house because it has a greater resistance to wind damage. By contrast, frame homes are better in the earthquake-prone West. The right structure in the right region can save you 5% to 15%. Additionally, if your home is near a fire station, you will pay less for homeowners insurance.
6. Big discounts if Your Home is NEW
You get a discount if your home is new. The reason for this is that with a newer home, the likelihood that something will go wrong is smaller. The plumbing, wiring, and central heat and air systems are major expenses involved in owning a home. Since the building is newer, it is therefore sounder.
7. Insure the house, Not the Land
Nobody is going to steal your land. Fire and high winds won’t “destroy” it. As such, when deciding how much homeowner’s coverage to have, do not include the value of the land, only the value of the house and any other buildings on the property. Market value is the total value of your home, including the land, so lakefront property could be worth $400,000 ($300,000 for the property and $100,000 for the house). The bank may ask you to insure up to $400,000, but as we mentioned, land can’t be destroyed. Your insurance agent may need to step in for you to negotiate with the bank. If you include the value of the land, you are paying too much.
Is Your Coverage Adequate?
Saving money is important to us all, but we have to make sure we are protected as much as we can be for the money we spend on insurance to be worthwhile. Ask yourself, “Is my coverage adequate?” Is it meeting the needs of you and your family? In the following section, I will briefly outline how to find out if your homeowners insurance is working for you.
I won’t avoid the facts. There really is more to homeowners insurance than saving money. In fact, while it’s nice to lower your insurance costs, it’s even more important to make sure you, your loved ones, and your assets are covered adequately. It is not a pleasant thought, but insurance is about worst-case scenarios. It is mostly about peace of mind, knowing that you have the worst-case scenarios covered.
I want to let you in on the knowledge I have accumulated as an insurance industry professional and insider. I want to do this because I have found, time and time again, that generosity and the willingness to provide really great service come back to me tenfold. In fact, that’s how I have built my business.
Two Steps to Protection
There are two basic steps you can take to protect your and your family’s financial well being. The first is to have an insurance specialist conduct a risk analysis of your home, car(s) and family. If you have not had your risks assessed by an insurance professional, you could be inviting financial disaster. Insuring your home is not a “do it yourself” project. You need a professional, a knowledgeable insurance insider, to put together a comprehensive insurance plan that truly protects you.
The second step is do not trust the financial protection of you, your family, and your assets to an insurance agent who is not a homeowner’s insurance specialist. A specialist in the field is an absolute necessity. I am glad to share my expertise with you. Your agent should gladly do the same. Insurance is a huge industry.
There is insurance for almost everything and that is why I am helping you to educate yourself using this book to make informed choices for you and your family’s insurance needs