Home insurance, a legal necessity when you begin paying your mortgage, and a practical tool after, can have significant costs if you do not buy the right insurance to fit your needs.
1.) Raise your deductible.
If you are unwilling to take any of the risk then you will be forced to pay extra for that choice. But insurance is designed to protect you from unforseen excessive costs. If you set your deductible at a reasonable level (preferably at or above $1,000) that will significantly lower your premium.
2.) Only insure your home - not the land.
While the land may be part of the price you paid for your home, in most cases you do not need to insure it as it is not likely to be lost/destroyed/diminished in value by a fire or a burglary.
3.) Shop around
Insurance contracts are essentially bets that companies make that something will not go wrong with your home/car/health/life/etc. Risk premium calculations can vary widely between different companies. Shop around for the best deals possible.
4.) Ask for discounts
5.) Keep a clean credit score
Since insurance contracts are risk contracts many insurance companies use credit scores in part to determine how risky a particular consumer may be. Paying your bills on time and keeping credit card debt low are keys to building a strong credit score.
6.) Install protective & safety features
Ask your insurance agent questions about discounts for observing home safety and security protections. Fire extinguishers, deadbolt locks, smoke detectors, and alarm systems can significantly lower your premium.
7.) Stop smoking
Smoking causes over 20,000 fires a year. If nobody in your home smokes, inform your insurance agent and you may be eligible for a discount.
8.) Make sure your homeowner’s insurance is comprehensive
If you are in an Earthquake or flood prone area make sure you buy additional coverage. These additional insurance coverages can cost hundreds per year, but generally are not part of a typical home insurance contract.
9.) Inventory your possessions yearly
If the value of your home and/or possessions changes significantly, make sure you inform your insurance agent and adjust your policy.
10.) Ask questions!
You can reach your state Insurance Department using the following phone numbers:
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