People usually make the mistake of buying the first policy for house insurance that they could get their hand to. It is a fact that most people do not have any idea what a deductible is and this in turn makes them not fully understand what their policy covers and do not know if they are already paying too much for house insurance.
You may think that it is impossible to save in house insurance. You are only unable to save because you did not spare yourself some time to do your research and make an extra effort on your part. Here are some tips that could help you save on house insurance.
You should shop around for the right policy
When you plan to buy an appliance, I’m sure that you go to the lengths of shopping around in order to get the most affordable price possible. If you do this when buying other things, then there is no excuse that you do not shop around for the most affordable policy. Different policies from various companies are not the same. You could be saving a lot of money if you take the time to compare the prices of different policies. You can start by having at least four insurance companies to compare. You can ask your family or friends what are the best companies to trust so that you have at least an idea where to begin.
You should increase your deductible
If you have no idea what a deductible is, this is the amount of money that you have to pay with your own money before your insurance policy kicks in. Many people choose to have a deductible of $500 and refuse to make a claim not unless the cost of damage on their homes exceeds $1000 or $2000. When you make a claim, expect that the amount you pay for insurance will also go up that is why people avoid filing for claims not unless they are facing a very big amount that they have trouble of shouldering. If you are willing to spend $1000 to $2000, then it is better to choose a deductible with this amount since a higher deductible means lower costs of premiums.
Know the value of your house
The price of your house can change any time depending on its market value. You should be sure that you are paying an insurance value that corresponds with the current value of your house. You should check this with a real estate agent and ask for an appraisal of your property. You can also check with www.zillow.com. The idea behind here is that you should not be paying too much for insurance.
Insure only your house and its contents
You should not insure the land itself since it cannot be damaged. You should know what percentage is your land value. You should check your property tax bill to be able to get a breakdown of your house in relation to your land where it is built. You can use the property tax bill especially if you live in an area where properties are reappraised every time. For example, if your tax bill shows that your property has a total assessed value of $160,000 with a breakdown of $120,000 for the house and $40,000 for the land, then this means that 25% comprises the land value. If your property is now estimated to be at $200,000, 25% percent of this value is land. Then, you should insure your house for $150,000 and not the total value of $200,000.
You should know the discounts offered
Different companies are willing to give you discounts if you meet their requirements. You should ask the insurance company since they sometimes fail to mention these if you do not mention it. Here are some discounts that are commonly offered by providers:
- Deadbolt locks, an alarm system and smoke detectors can save you up to 5% each. If you have these installed in your house, you might as well get the discount to recoup your investment on them.
- You can get additional discounts for features such as reinforcements against wind damage and for certain types of secure roofs.
- If you are at least 55 years old, you can get a senior citizen’s discount. This is due to the fact that retired citizens stay in their house most of time, reducing the risk of break-ins and burglaries.
- You can earn as much as 15% for sprinkler system and a burglar alarm that is wired to the police station.
If you have made the necessary comparison, you can then buy a home insurance for yourself. You should be able to understand all the contents of your policy so that when the time comes that you need to file for a claim, there will be no problem at all.