5 steps on how to save on homeowners insurance premiums
Homeowners insurance seems to be going up everyday, and with new regulations it is almost impossible to determine how much we will be paying for our homeowners insurance in the future (also, keep in mind that everything varies based on location, so for example, Miami merchant services will be different than in other areas.) With the recent natural disasters that have followed, the average annual premium has gone beyond $1000, and some possibly beyond the double digit rate. Follow the 5 steps below on how you can save and avoid a headache down the road.
Step 1. See how much coverage you need
You have to determine what is important and of value in your home, on some homeowners insurance you may be paying a higher premium to save the electronics in your home. Is this a priority for you? Do not solely base your coverage level on the home’s appraised value, you should use the recent per-square-foot costs in your area, which you can get a copy of with your home-builders association. This can make a difference on how much you pay.
Step 2. Check your deductible.
Deductibles can change, so it may have changed from the time you bought the house, to just last years deductible rates. Many insurance companies are changing the deductible rates from set dollar amounts to percentages, this may have a substantial change in your rates, not all insurers are switching from dollars to percentages so make sure with your coverage first. You may want to try to go for the highest deductible so that you can lower your premium. Please note; that the deductibles are based on a percentage of the insured value of your entire home, not just what needs to be fixed. Let’s say you have a $300,000.00 home with a 5% deductible, this may still be too high of a price to pay, and you may want to shop around for a better deductible rate.
Step 3. Check what is not covered on your coverage.
Do not assume that everything is covered on your insurance, because that is the first mistake most homeowners make. Most coverage’s exclude damages from flooding from hurricanes, landslides or earthquakes. Make sure to ask your insurance company about what you are covered for in regards to natural disasters. If you are in a flood zone, you may be required to have an additional coverage which may increase your coverage. You also want to look into regular home necessities, like broken pipes or mold in your home.
Step 4. See what you can exclude from your Premium.
Your insurance company is not going to tell you about the rates increasing on your premium, so look at last years premium and compare it to this years premium. If your rates have increased, call your insurance company and ask them to explain the reason. Having knowledge on why your rates may have gone up will allow you to compare and shop around for another company if need be. Every couple of years you should compare and shop around to ensure that your insurer is giving you the right price.
Step 5. Get it done.
Get all your documents in place and make sure you have a home list inventory with photos or videos on valuables, receipts and paperwork that you may need. Make sure to either keep these notes in a fireproof box or in a safe deposit box. It is also great idea to scan all the information in a flash drive, that way if anything happens you will always have it saved on a computer.
Double checking your coverage every year is important and it can ensure you that you are paying the right premium without over paying.
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