Insurance Savings For Homeowners
The easiest way to begin is to simply call your homeowner's insurance provider and inquire about ways to save money
. The company wants to keep your business and will usually be glad to help you trim your policy to better suit your needs. Ask if there are any discounts for which you qualify such as those given to long-term customers, dual-policy holders, association members, or retirees.The quickest and most simple way to save is to carry a higher deductable, the amount of money you must pay in the event of a disaster before your insurance will begin to pay. For example, if a storm causes five thousand dollars in damage to your roof and your deductable is five hundred dollars, you will need to pay for five hundred dollars of the repair and your policy will provide for the remaining forty-five hundred. At first glance, this doesn't sound like a bad deal, but consider that carrying a low deductable such as five hundred dollars can cost you twenty dollars a month more than choosing a one thousand dollar deductable. Assuming you pay one thousand dollars per year in premiums, in essence you are paying two-hundred-forty dollars a year in order to only pay five-hundred dollars if something happens to your home. Unless something major happens to your house every two years, you are losing money. Opt for a twenty-five hundred or five-thousand dollar deductable, and your monthly premiums will significantly diminish. If the possibility of paying five-thousand dollars is daunting, consider setting aside that amount in an accessible savings account before changing your policy. You will not only accrue interest on that account, but you will also save monthly as you pay your homeowner's insurance premium.
The next big money saver is to insure your home-the structure-against theft and disaster, not the land it is sitting on. When you buy or build a house, you are also paying for the land on which the home is built, but in the event of a disaster, you are not going to lose the land. Assess the value of your land and subtract it from your original mortgage. A home purchased for two-hundred thousand that is sitting on a thirty-thousand dollar lot need only be insured for one-hundred-seventy thousand.
Also pay close attention to the principal balance of your loan, once you have paid for twenty percent of your home's value, you can ask to have mortgage insurance (this is different than property insurance) removed from your policy. If you put twenty percent down on your home or if you are carrying a V.A. loan you should not be carrying mortgage at all.
Take these four steps with your current company before shopping around for a different company, and check back with once a year to be sure that you are not paying any unnecessary costs, to check to value of your home versus your principal balance, and to see if any new discounts can be applied to your policy.
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