Trimming the “Fat” Off Your Homeowners Insurance Policy
Homeowners Insurance includes four essential types of coverage; the structure, personal belongings, liability, and additional living expenses. The first addresses the coverage of any damage that is done to the structure of your home or any detachable fixtures such as sheds, gazebos, and garages when a fire or disaster occurs.
The second addresses coverage for your personal belongings, which would include both those in your home and any outside property such as trees and shrubbery. This is a percentage of what of is already being covered from the insurance on the structure of your home. The ultimate way to determine if there is enough being covered is to do a home inventory.
Liability protection (umbrella insurance) covers any costs against you for any type of property damage or bodily injury that may occur to another person from you, another family member and from pets. To note this is just not while you are in your home, but any place in the world. There are various policy options that can be discussed with your homeowners insurance company to determine the best coverage and affordability of a specific policy.
Lastly, additional living expenses coverage is when you are temporarily unable to live in the home in the effects of an insured disaster occurs. These would include any hotel or customary living expenses while your home is being rebuilt or rented out.
Although these home coverages are the four essential types, it is always important to discuss all the specifics and limitations of each coverage and policy with your insurance company to determine what is being covered in the policies and when it will be covered. It is also important to discuss the amount that you can afford for each coverage and policy to determine the best option for you.
The How To’s of Homeowners Insurance Trimming
- Always shop around first. Although it can be time consuming, you could save a good amount of money from “shopping” around for the best home insurance company. Getting homeowners insurance quotes from various companies can give you an overall idea of price ranges.
- Bundle options and discounts. This is one of the most important discounts you can receive. When you bundle your homeowners insurance you are demonstrating to the insurance company that you want to build a long-term relationship with them. Bundling insurance policies can result in a percentage off your premium if you buy two or more policies from the same insurance company. One of the most popular examples are bundling your home and auto insurance together. However, do ask what the policies are separately first to determine if the combined amount equates to a lower cost than the individual ones.
- Protect your home. Make it more disaster resistant; improve home security; and modernize heating, electrical and plumbing systems. Doing this will help you save on your premiums. When doing these things the insurance company will discount you on trying to also protect your home at all costs. Even though some of these are expensive, they can help you save money over time.
- Review limits in your policy and raise your deductible. In doing this you can review any major purchases or additions to you home that you may want to include and anything that you wish to remove or reduce from your coverage. This allows you to know the value of your home and personal belongings when budgeting your money more effectively.
- Good credit! This is important, because insurance companies are beginning to increase the use of credit information to determine the price for policies. In having a good credit history, you can actually end up lowering the price of your policies and could even provide an additional discount in some companies.
- Know the location. Another way to cut costs is knowing the location and the area in which you are living. If you are near a river or lake, flood insurance is not included in standard homeowners insurance policies, so expect to pay additional money to obtain that specific type of coverage. If you are planning to move to an area that you are not familiar with, do your research. Getting a lay of the land beforehand could save you money on insurance policies.
- Get a CLUE. The Comprehensive Loss Underwriting Exchange (CLUE) report gives you the history of the insurance claims of the property you are thinking about purchasing and it can give a sound judgment call of any problems a house may have. This is will help in determining any policies that are necessary so you are not over spending on home coverage.
Need Help Searching for Homeowners Insurance in the Michigan Area?
If you need help in searching for the right homeowners insurance for you, Compass Insurance Agency is here. We help you get the most affordable home insurance rates with the best coverage to fit your needs.