Anyone can run to the first insurance company and pay for some insurance, but that is not likely to be the optimal insurance purchase. You want to maximize the discounts you receive on your premiums while ensuring that you are receiving adequate coverage. Here’s a list of suggestions that can help you get the most out of your homeowners insurance.
Getting the proper coverage
Getting the proper coverage not only provides you with a sense of security, it ensures you that you will be covered when a claim needs to be made. The following list suggests ways for you to ensure that you will receive the proper coverage when you need it.
Buy the guarantees. Traditional guaranteed replacements promises to pay for whatever it takes to rebuild your home, even if building costs and materials have gone up.
If your policy doesn’t include it, ask for replacement cost coverage for your home’s contents. Otherwise, you’d end up with the depreciated value of any item that is damaged or stolen.
Consider umbrella liability coverage. This covers your regular homeowners liability limits and beyond. It comes in handy if you are ever sued. An umbrella policy kicks in when you reach the limit on the underlying liability coverage in your homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander. The drawback is that it only kicks in after your underlying liability coverage is exhausted, and most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 on your homeowners policy before they’d sell you an umbrella liability policy for $1 million of additional coverage.
By insuring 90% of your home, you’re making a guess that your house will never be totally destroyed. However if you want to play it safe, insure 100% of your home.
The safest way to go is to seek a company with no cap. That is, unless you’ve properly estimated the cost of replacing your home.
Keep good records. The more information you provide on your claim, the more likely you’ll receive fair compensation. Photograph or videotape your home as proof of what you own, and keep these and a copy of your homeowners insurance policy outside of your home. In the case of an accident, record your version of the accident/event, take photos, and get a police report. Call your insurer A.S.A.P., and keep a note of related conversations. Keep track of medical, home-care, babysitting, or housekeeping bills. Also keep a record of living expenses if you were forced to live someone else temporarily.
Update your policies regularly. Inform your insurer if you’ve added improvements, additions, and redecorations to your home worth $5,000 or more. For example, those who own homes damaged or destroyed in the recent California fires and who have not updated their policies to account for renovations and higher building costs may not be fully compensated for the damage done to their homes.
Consider hiring a public adjuster licensed by your state to walk you through the claims process if you feel overwhelmed by the process.
Tip:Twelve states (Alabama, Alaska, Arkansas, Iowa, Kansas, Mississippi, Louisiana, North Dakota, South Dakota, Tennessee, Virginia, and Wisconsin) don’t have licensing laws that apply to public adjusters.
No one wants to pay more than he has to for insurance when it isn’t necessary. The following are ways to keep your homeowners insurance costs low while also receiving proper coverage.
Demand discounts.
You would save yourself a lot of money if you remember to ask for discounts.
Be sure to let your insurance carrier know if you have a home security system, or if you live near a fire department or hydrant, own a newer home, and/or own a home built out of fire-resistant materials.
Certain types of people such as senior citizens are eligible for discounts.
You may receive a discount if you have certain safety or protective equipment installed in your home. The catch is that you’ll have to ask for a discount.
Maintain good credit. How a person manages his/her finances is a good indicator of how often or likely he/she will make an insurance claim. Don’t obtain more credit than you need and pay your bills on time.
Combine your auto coverage with your homeowners coverage since it’s cheaper to get two different coverages from the same insurer.
Raise your deductible and lower your premium. You pay premiums much more often than paying a deductible.
Make your home hazard-proof and resistant. Find out from your insurance carrier what you need to install or do to your home in order to make your home more resistant to natural disasters. You may be able to lower your premiums by adding storm shutters and shatter-proof glass, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. Also consider updating your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
Don’t include the value of the land your home is on when deciding how much insurance to buy. You would end up paying a higher premium than you should if you do since the land isn’t protected from theft and other hazards covered by your insurance policy.
Keep your policy updated and reread it before you make a claim. You’ll want to have new purchases or additions to your home covered, and you don’t want to pay for coverage for something that’s depreciated or for something that you don’t own anymore. Update your policy when your policy comes up for renewal, when you make major purchases or alterations to your home, when you’ve made your home safer, and when you’ve made a lifestyle change such as marriage, divorce, or home business.
Don’t buy more than the minimum offered. Also, remember to include the cost of homeowners insurance when you are buying a home. Otherwise, you may end up not being able to afford homeowners insurance on your new pricey home.
Frequent claims are a red flag for insurers. Try not to make claims that are worth under $1,000. Some companies won’t insure you if you make more than two claims in three years. If your claim is less than $1,000, try to grin and bear it and cover it yourself.
