How Much Homeowners Insurance You may be tempted to save money on your homeowners insurance by buying the minimum amount available or what is mandated by your homeowners insurance policy.
However a little extra protection now can prevent a financial disaster later, and I have some other money saving suggestions.
First, consider covering the replacement value of your home and property, and not the appraised value.
If you belongings would be destroyed in a fire or storm, or if they were stolen, the appraised value would be the amount you could get for them if you sold them used.
Imagine taking your $1,000 flat screen TV to a garage sale, and getting $75 for it! If you do not want to replace all of your belongings at a thrift shop or garage sale, then you should cover the replacement cost.
As for your actual home, you should also consider replacement cost.
It will probably cost you more to rebuild your home than it did to buy it, especially if you home is not brand new.
The home you purchased for $100,000 ten years ago, may cost $150,000 to rebuild.
If you do not want to have to take out another loan, or move on in order to have a home, consider the replacement cost.
Also think about your living arrangements if your home was damaged.
You would probably need to find another place to live while your home is repaired, or you may even need relocation assistance if your home is totally destroyed.
Think about the cost of a hotel room or apartment on top of your current mortgage.
If that expense is not included in your current budget, then make sure the homeowners policy that you do have includes temporary housing coverage.
Ways To Save Money On Homeowners Insurance If you price a homeowners policy that includes replacement value and relocation assistance, and the premium seems to high, I have a suggestion or two.
Consider increasing the deductible.
If you have a homeowners insurance policy that requires you to pay the first $1,000 instead of the first $500, you will probably save the difference in premiums within the first several months of paying your premium! Also make sure you take advantage of available discounts.
Many insurance companies will offer you a discount for safety features to help you prevent or detect fires, or anti-theft devices like burglar alarms.
Check around.
You may already have installed features in your home that could qualify for a discount.
If no, the cost of some safety features, like fire alarms, is very small.
However a little extra protection now can prevent a financial disaster later, and I have some other money saving suggestions.
First, consider covering the replacement value of your home and property, and not the appraised value.
If you belongings would be destroyed in a fire or storm, or if they were stolen, the appraised value would be the amount you could get for them if you sold them used.
Imagine taking your $1,000 flat screen TV to a garage sale, and getting $75 for it! If you do not want to replace all of your belongings at a thrift shop or garage sale, then you should cover the replacement cost.
As for your actual home, you should also consider replacement cost.
It will probably cost you more to rebuild your home than it did to buy it, especially if you home is not brand new.
The home you purchased for $100,000 ten years ago, may cost $150,000 to rebuild.
If you do not want to have to take out another loan, or move on in order to have a home, consider the replacement cost.
Also think about your living arrangements if your home was damaged.
You would probably need to find another place to live while your home is repaired, or you may even need relocation assistance if your home is totally destroyed.
Think about the cost of a hotel room or apartment on top of your current mortgage.
If that expense is not included in your current budget, then make sure the homeowners policy that you do have includes temporary housing coverage.
Ways To Save Money On Homeowners Insurance If you price a homeowners policy that includes replacement value and relocation assistance, and the premium seems to high, I have a suggestion or two.
Consider increasing the deductible.
If you have a homeowners insurance policy that requires you to pay the first $1,000 instead of the first $500, you will probably save the difference in premiums within the first several months of paying your premium! Also make sure you take advantage of available discounts.
Many insurance companies will offer you a discount for safety features to help you prevent or detect fires, or anti-theft devices like burglar alarms.
Check around.
You may already have installed features in your home that could qualify for a discount.
If no, the cost of some safety features, like fire alarms, is very small.
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