Homeowners insurance is extremely important for every homeowner because it provides them financial protection in the event of an accident or disaster involving their home. In general, homeowners’ insurance policies are package policies with coverage not only for damage to the property but also for the legal responsibility for causing property damage and injuries to others by the insured homeowners or their family members.
Homeowners insurance is essential for the homeowners because the lenders often require adequate insurance before they decide to fund a loan. Banks and other lending institutions insist on homeowners’ insurance because they typically put up approximately 80% of the value of a home in cash.
Some homeowners just hate paying for homeowners insurance because they find it useless to shell out money for an intangible product month after month. While it is extremely important to have a homeowner’s policy, it is possible to reduce this cost significantly by making some smart decisions.
According to Massachusetts based LoPriore Insurance Agency, the price paid for homeowners insurance can vary significantly based on several factors. Mentioned below are some ways to lower this cost without compromising on facilities.
- This could mean some extra work for you, but it is possible to save a good sum of money by shopping around. Try checking the Yellow Pages, seek recommendations from friends and family members, and get in touch with your state insurance department. You may also visit the website of the National Association of Insurance Commissioners to find out reputable insurers in your state. Don’t forget to check with different online insurance quote services, insurance companies, and agents, and consumer guides to getting an idea of price ranges. This will help you identify companies offering the lowest prices. Finally, assess the service quality of the companies by accessing complaint information from different online sources.
- The deductible may be defined as the amount of money the insured individual needs to pay towards any particular loss before the insurance company starts paying the claim as per the policy terms. If the deductible is high, it is possible to save more money on premiums. These days, insurance companies generally ask for a minimum deductible of $500. If this can be increased to $1000, the insurer may end up saving as much as 25%. It is also important to remember that policies sometimes have a separate deductible in a disaster-prone area, for certain types of damage.
- It is important for the homeowners to understand that the land under the house is not at risk from fire, windstorm, theft, and other perils. Therefore, there is no need to include the land value while deciding on the insurance amount to purchase. This means unnecessarily paying a higher premium.
- It may be helpful to purchase the auto and home policies from the same insurer. Companies selling auto, liability, and home coverage sometimes take off 5 to 15 percent from the premium for customers purchasing multiple policies from them.
- It is also a great idea to make homes more resistant to different types of natural disasters. By reinforcing the roof, adding storm shutters, or buying stronger roofing materials, one may be able to reduce the premiums to some extent.
- Homeowners installing deadbolt locks, burglar alarms, or smoke detectors usually receive at least 5% discounts on their premiums. On the other hand, by installing a fire and burglar alarm or a sophisticated sprinkler system, it is possible to cut the premium by as much as 15 or 20 percent.
- It is also possible to reduce insurance cost by establishing and maintaining a solid credit history. Credit information of the consumers is increasingly used for the pricing of homeowners’ insurance policies. Therefore, homeowners looking to reduce their premium should keep their credit balances as low as possible, not obtain more credit than required, and pay bills on time.
