Choosing the best types of homeowners insurance can be costly and confusing if you do not know exactly what kind of plan you need. A number of factors influence your premiums, but there are things that you can do to cut costs. Making a few smart decisions will give you the coverage you need and could save you hundreds of dollars each year. In this article, we’ll tell you how to protect your home and your peace of mind.
When you find a house, ask your real estate agent about its potential insurance costs. The age of electrical, plumbing and other systems within the home can affect your premiums. If you have specific items for which the value exceeds your policy limits, then you may elect to add a “personal articles floater” to your coverage. You may be able to purchase a personal articles floater for as little as $30 a year to insure your most valuable possessions for their current purchase price or recent appraised value. Often used to fully insure engagement rings or electronics, “floaters” have no deductible and usually cover a broader range of claims, such as theft or loss away from the home.
Your home’s location greatly influences the types of homeowners insurance premiums you will have to pay as well as coverage availability. If you live in an area prone to severe weather and natural disasters, then your premiums will reflect that. Your rates also may be affected by the neighborhood you choose. Living near a fire department will reduce your insurance. Studies indicate that most homeowners don’t insure their homes to replacement value. Replacement value is what it would cost today to rebuild a home. If you’ve remodeled your house, then your insurance coverage should be updated to reflect the replacement cost. Increasing your insurance coverage will raise your monthly premiums but a higher deductible can lower your monthly premiums significantly. Consider purchasing a security alarm to deter thieves and prevent a costly break-in. Easily accessible fire extinguishers are another good addition to any home.
If the unthinkable occurs, having up-to-date records of your home’s contents can be invaluable during the claims process. Take an inventory of your belongings, including how much you paid for each item and its current value. Make a record of your possessions with pictures or a video camera and store the records outside of your home so they won’t be destroyed in a disaster. The records can help you determine your coverage needs and it also can serve as your proof of ownership if a loss occurs.
Homeowners insurance is an absolute must, so take care with the plan you choose and maintain your coverage. If you perform major renovations that impact home values, then adjust your insurance coverage to reflect that. No one likes to think of the worst case scenario, but the right insurance plan will give you peace of mind.