Homeowners Insurance
Homeowners insurance, is one of those things you can
not avoid. Most mortgage companies require an insurance
policy be taken out on the house within 24 hours of closing.
Since you can not get out of it, the next best thing to
do is save some money.
There are mistakes that some people make when buying
a home owners insurance policy. If you try to avoid some
of these things, you should be able to save a good amount
of money.
First let us discuss the different types of coverage
you can get:
Replacement Cost Insurance
A Replacement Cost Insurance policy pays the amount it
costs to replace the house. This policy does not deduct
any funds for depreciation, but it has a maximum dollar
amount. So you should pay close attention to the cost
of rebuilding your home, to make sure it does not exceed
the maximum payout.
Guaranteed Replacement Cost Insurance
A Guaranteed Replacement Cost Insurance policy also pays
the amount it costs to replace the house. This policy
does not deduct any funds for depreciation, and has no
maximum dollar amount. Keep in mind that this policy is
sometimes limited to 120% of the cost of rebuilding the
house.
With this policy, you have the piece of mind of knowing
that you can have your house rebuilt, no matter the cost.
Check to see if this coverage is available in your state.
Actual Cash Value Insurance
Actual Cash Value Insurance does not guarantee full payment
of the cost to rebuild your home. Instead the insured
receives what the insurance company determines as the
worth of the property including subtractions for depreciation.
Unless a homeowners insurance policy says it covers the
replacement value of the property, it covers the actual
cash value. Here are a few ways to cut your homeowners
insurance premiums:
Get Different Quotes
There are many insurance companies looking for new customers.
It is best to let these companies know that they are competing
for your business. A good way to get quotes is to use
an online quote system. These programs submit your information
to many different insurance companies, and they all compete
for your business.
These online programs are generally free and require
no commitment. There is a pretty good chance you can save
money this way.
Get Higher Deductibles
With higher deductibles, your premiums will decline. Be
careful doing this because you want to make sure you can
afford a higher deductible if there is an emergency.
Combine all your Insurance Policies
If you get all your different kinds of insurance like,
auto, life, and health with the same company, you can
usually get a discount.
Do not insure your land
Most people make the mistake of including the cost of
their land into their insurance coverage. You should learn
the cost of rebuilding your house, and get enough insurance
to cover that plus the loss of just your property.
Secure your home with early detection devices
Equipping your home with smoke detectors, an alarm system,
fire extinguishers and other early detection and safety
equipment, can approve you for discounted homeowners insurance
rates. You should ask your insurance company what you
can do to make your home qualify for these discounts.
Read our review on Lowering your
Homeowners Insurance
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