5 Ways Your Family Can Cut Home Insurance Costs
In this uncertain world, people are constantly exposed to the possibility of the loss, damage, and destruction of their beloved property. Meanwhile, the home insurance world is filled with companies and salespeople who want to sell their latest “hot product” for one particular reason — to make money, and consumers often let them. With all these facts, how does one decide what to insure, how much to insure, and where to insure without spending a ridiculous amount of money and time on them? If these five ways can help anyone buy the right insurance with the right “ingredients” and cost effective benefits in full force, they will have accomplished their objectives:
- Explore the market for the best rate: Insurance companies are willing to share the major economic loss of losing one’s house to highly predictable exposed risks, all for low deductibles. In a hurry to finance those risks and zero in on a particular rate, consumers are likely to skip insuring certain basic needs. Would a lender lend a substantial amount of money for a mortgage on a house if the fire insurance is not covered? It certainly wouldn’t. Those who wish to avail the benefits of an insurance policy should have the ability to weed out the risk-financing methods that have unneeded clauses and little prospect of paying meaningful benefits and consider the ones that generously pay for inevitable losses.
- Determine the insurance needs: Having adequate coverage for valuable items such as silverware, jewelry, and firearms, along with appraisals, is a great move on the insured’s part. But does the declaration page of the chosen policy mention every piece of furniture the insured owns? Even the shoe stand bought from the flea market? Then it’s time to revise the inventory list. The medical payment provision protects the insured by requiring that the company pays reasonable expenses incurred by someone’s pet that is injured on the premises of the insured. It also has the provision of paying if the pet is injured outside the premises, but the injury was the result of an activity of the insured. Unless the neighborhood is close to an animal rescue shelter, the coverage is unnecessary.
- Choose the relevant policy, not a random one: Very few people are aware of the fact that there are varieties of homeowners coverage with differing levels, for various types of residences. For example, A HO-1 policy covers the most basic needs-protection against fire, vandalism, glass breakage, theft, lightening, and volcano. The improved version of HO-1, the HO-2 policy, covers loss caused by ice, snow, heating, and air conditioning, water, electricity and plumbing, in addition to the “basic” coverage. But the most cost-effective policy, the HO-3 policy, that does not literally mention the perils of coverage, includes “all-risk” applicable to the house or other structures with an HO-15 endorsement, in a way that makes sense. The renter’s policy, known as an HO-4 policy, provides broad form coverage for personal property including reimbursement of outside living expense up to 20 percent. The HO-8 policy is exclusively for privately owned freestanding homes that will not qualify for any other policies. As one can realize, the insurer always seek to limit their exposure to certain risks. Therefore, it’s important for the insured to be aware of the limits of the coverage, and accordingly choose the appropriate one that can make a big difference in the premium.
- Install safety devices: This is a great opportunity for the insured to reduce the annual cost of their homeowners insurance policy. The insurers are always on the lookout for individuals who are willing to opt for “controlling” the risk rather than “financing” it through them. A simple task of installing smoke detectors, CO2 detectors, fire extinguishers, and other protective devices can go a long way in reducing one’s exposure to loss, thereby reducing the premium. After all, prevention is always better than a cure.
- Other factors that influence the premium: The insurance company makes sure that the insured cooperates fully, does the procedures promptly, and is able to act responsibly money-wise before issuing the policy. The premium amount can change if the person does not comply with the conditions listed on the pages. Also, the insurer expects the insured to identify each risk and determine how to treat it with a “first-aid” approach. In the case of property damage, it’s the responsibility of the insured to protect it from further damage and separate the damaged property from the undamaged. Providing accurate and detailed information on the loss, such as the origin, occurrence, occupancy and so on, can create a strong positive impression. Having multiple policies with the same company is advantageous too, as long as the company is trustworthy. Note that the states vary in the quality and quantity of their regulations — companies licensed in more conservative states have a restrictive approach when dealing with their customers.