Homeowner’s insurance protection is just what you need to provide financial protection for your home and its contents. Because so much value is at stake, you want to make sure that you have a good investment. Here are some tips on how you should decide which homeowners insurance policy you need.
Buy the Home Insurance You Need – Not What You Want
As you start to consider what your home insurance protection needs are, you want to calculate how much house insurance you really need. Your needs could be less than your home is worth now because it costs less to build a home than it does to buy an existing home.
This means that your home insurance does not have to equal your current home’s value, but can be considerably less. In addition, if anything happened to your current home, you can always rebuild a smaller home. This could lower your insurance coverage needs considerably. Since it is quite possible you may never need to make a claim, this could keep more cash free to be able to use somewhere else.
Raise Your Deductible to Lower Premiums
Once again, you never really know in advance whether or not you will ever need homeowner’s insurance – hopefully not. But you do want to be sure to have it if you ever do need it. By increasing your deductible, you will lower the cost of your monthly premiums even more. Of course, you will need to have some money handy if you ever do suffer a loss because the insurer expects you to pay your portion first.
Buy Replacement Value Rather than Actual Value
Homeowners property insurance enables you to have some flexibility in the way your home is rebuilt. Replacement value allows your home to be rebuilt, but you can still choose good but less expensive building materials, which will enable you to save even more on your premiums. Knowing that you will use less expensive materials can enable you to lower your coverage needs even more.
If you choose to use actual value, then depreciation values will be subtracted from the amount that the homeowner insurance company will actually pay you. If you have an older home, you may actually end up getting less than 50% of the home’s current value – which may not be enough to rebuild.
Use Same Insurer for Multiple Policies
Instead of getting a different insurer for each of your insurance policies, you can put your homeowner’s insurance with the same insurer you already have. This will help you save money because insurance companies often give discounts for multiple policies, as well as for the number of years that you have a policy with that company. It will also help you to have less paperwork, too, since you may receive your bills from that insurer all in one bill, and make one payment each month.
Shop Around for the Perfect Home Insurance Package
Even with a number of effective ways to lower your monthly premiums, you can still get a better deal by shopping around. Once you get several homeowners insurance quotes, you can compare the results. Take a little time to investigate the insurance company if you are unfamiliar with the name.
Make sure you understand exactly what is covered, and what is not. Homeowner’s insurance policies only cover the disasters that are listed, which will not include floods, hurricanes, or earthquakes unless you buy that as a supplement (rider) on your home insurance policy.
