How to Minimize the Cost of your Homeowners’ Insurance
Homeowners’ insurance is required by many companies before they even consider a mortgage for a buyer. However, very few places tell you what you need to consider when shopping for homeowners’ insurance. It’s not the same as life insurance or car insurance, and although it serves a similar purpose, homeowners’ insurance is a horse of a different color. In addition to the fact that is can be vastly more expensive than other types of insurance (with some policies ranging between $500 and $1000 a year), homeowners’ insurance serves to protect both the homeowner and the lending agency. There are steps that you, as the owner, can take to minimize what you pay in insurance costs annually:
Raise the Deductible
Raising the deductible sounds like a good idea because you have to pay less annually for your insurance. The downside is that small problems such as broken windows and leaky faucets will usually have to be absorbed by the owner with their own private funds. If you have a raised deductible, you cannot afford to settle for the lowest common denominator for repairs, because it usually means you’ll be spending more in repair costs than you would in homeowners’ insurance. Though you may pay a little more for high quality workmanship, it’s definitely worth it in the long run.
Shop for Insurance with the Same Company for Discounted Rates
Most insurance companies that offer homeowners’ insurance give a discount on it if you take out another policy under the same policyholder. If you decide to take out two separate policies (let’s say homeowners’ insurance and car insurance) with the same company you might get as much as ten percent off (or more) for your loyalty to the company. These benefits can end up saving you more on not one but two or more insurance policies.
Install a Security System and Smoke Alarms
One thing homeowners’ insurance requires is that you care for your home. Having preventative measures in place to avoid disaster benefits the company underwriting your insurance and due to this, you can usually get better rates if you have preventative measures installed. Not just any alarm system will do, however. The alarms must be linked centrally to a fire station or police station and proof of installation must be presented in the bill statement for the service. The total discount can be as much as 5% for each security alarm and as much as 10% for smoke alarms. Smoke alarms have the added benefit of being able to save your life in the case of a conflagration.
Homeowners’ insurance doesn’t need to cost as much as it does. By taking the right steps you can limit the amount you have to fork out yearly. Remember, although insurance seems like a frivolous cost, it comes in handy when you need to use it. Limiting your cost for insurance helps you to regain money that can go towards your mortgage. You can’t forgo Homeowners’ insurance, and it’s more of a godsend than a curse in your long term home maintenance.
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