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Homeowner' Insurance Costs |
As you prepare to buy a home, one of the things you will be required to have is homeowners'
insurance. Depending on where you purchase this insurance, you could be quoted a
significant difference in price, which consists of a number of factors. Most people will agree
that even the lower quotes are too expensive. The good news is that some things can be
done to help reduce the cost.
To begin, do not go with the first or even second rate quoted. Take your time and shop
around. If you have family or friends who own a home, ask them for references. You should
also consult with the insurance company that handles your automobile coverage. Usually,
when you add a homeowner's policy onto an existing automobile policy, you will receive a nice
discount anywhere from 10% to 15%.
If you still need assistance, buy a consumer guide at your local bookstore to find companies
and agents where you live that have positive reputations. As you talk with each company, in
addition to the insurance rate, you should also try to get a feel for the quality of their customer
service. Do you feel rushed? Are all your questions being answered? Did the person offer
to do some research for you? If promised a return call, did they call when they said?
Customer service plays a big role in buying a home so include this in the criteria for your
homeowners' insurance.
You also want to ask about the various options for a deductible. Typically, deductibles are
$500. If possible and if your budget can handle it, have your deductible increased to $1,000.
While you would have to pay more out of pocket should you need to file a claim, your insurance
rate could be reduced by as much as 25%! If you were to add up the savings in comparison
to the money paid when you need to file a claim, you would be surprised at the huge
advantage.
Additionally, ask about the specific area where you are planning to live regarding disasters.
You might live in the Midwest where tornados occur, on the East Coast where hurricanes
happen or even in a neighborhood close to a river where flooding might be a potential
problem. Regardless of the problem, hail, earthquake, storms, tornados, hurricanes, flooding,
and so on, you need to ensure your policy provides adequate coverage.
You can do things yourself to prepare your home. Again, if you live in an area where storms
are prevalent, adding storm windows or storm shutters would be an improvement. If you live
in a high crime area, you might install an alarm system. If you are buying an older home, you
could have it updated with newer materials that would lessen the chances of it falling during
an earthquake. Often, the insurance company will offer you a discount for taking proactive
measures, which saves them money in the end.
Finally, you need to make sure you have the appropriate content insurance, which is part of
the homeowner\'92s insurance. Not only do you want to ensure the actual structure is covered
but all of your belongings as well. Unfortunately, this one aspect is often overlooked. Make
sure you have replacement coverage. That means if you paid $3,000 for your new big-screen
television and it was to be damaged, your insurance company will pay you the $3,000 or the
current price to replace it.
Many times, homeowners will not have replacement coverage and when they go to replace
a 10-year-old television, they get $10 instead of the $300 it would cost to replace. If you have
any special antiques, jewelry or other valuables, typically, you would need to insure them on
a separate policy. Cover all your bases to make sure you are getting the best deal so you can
enjoy your home without being swallowed up by insurance.
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