Homeowners insurance is one of those things that you should always have. It protects your home and belongings if tragedy strikes. Even some renters are required to maintain insurance on a property. But the truth is most lenders require it on a home to cover the structure of a home if it were to become damaged or destroyed. Without it, the lender would have a mortgage on a home that was not worth what is owed on it.
The importance of homeowners insurance can’t be stressed enough. It is a way to ensure that if your contents and/or home were destroyed that they could be replaced. Even if a home is paid for, this coverage is still a good idea to have- just in case.
What does it cover?
Homeowners insurance covers a laundry list of catastrophes. Things such as lightning, fire, theft, storms, and almost every other natural disaster that can befall you are included. Some riders even cover flooding and plumbing. Always get a complete list of coverage before signing.
What can I do to get discounts on my homeowners insurance?
There are lots of things that you can do to help lower your homeowner’s insurance rate.
Companies typically give discounts for offering extra security protection on your home. This can range from a security system to smoke detectors. Always talk to your carrier before you have a security system or any other major item installed to ensure that the cost would be made up in savings.
In some cases, even being a non-smoker can reduce your premiums. Sometimes running a business out of your home warrants a higher premium. And, of course, seniors should always ask for discounts.
Things to watch for
One area that you will want to pay particular attention to is how you cover your items. This can be accomplished with either replacement cost or actual cost. Replacement cost means the company pays you what it would cost to replace an item with an exact duplicate. Actual cost, on the other hand, means you are compensated according to its current value. A TV might have cost $1000 five years ago, but now it might have an actual value of only $200.
How to get the best rates
Keeping all of your policies with the same company will often net you savings. If your current insurer doesn’t offer the best rates then maybe its time to consider moving everything to a new carrier. Sometimes just letting them know you are shopping around can give you reductions.
Another method is to raise deductibles. Just like car insurance, when you raise deductibles you are taking on more of the responsibility- if disaster strikes. If not, you can save the difference in the premiums.
No matter where you have coverage always check periodically to make sure you are still getting the best rate.
