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Trim the fat on homeowner insurance costs
Bankrate.com staff
There's no escaping it -- you must have homeowners
insurance to buy a house. What you can escape are the extra costs
that most folks end up paying because they haven't done their homework.
Here are a few financial secrets that will help trim the fat:
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Raise your deductible amounts.
If you're willing to accept a $1,000 deductible, you can save
almost 15 percent on your premiums.
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Take protective measures.
Installing a burglar alarm, dead bolts, or a smoke detector,
purchasing a hand-held fire extinguisher and having a non-smoking
household protect your home and lowers your premiums.
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Get replacement cost insurance.
Most insurance policies plan to give you the actual cash value
of your personal property in the event of loss or damage.
If you buy a $3,500 leather couch today, five years from now
it will be worth only $1,500 (because it's used). If you have
a fire when that couch is five years old, the insurance company
will pay you $1,500. Just try to find the same type of couch
for $1,500. It's not likely. However, if you have replacement
cost insurance, the insurance company is required to pay you
whatever it costs to purchase a new replacement item.
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Purchase your homeowner's
insurance from the same insurance company that insures your
automobile. Purchasing both policies from the same agent
or company may qualify you for a discount.
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Pay your homeowners insurance
annually. Although most insurance policies have annual,
semiannual, and monthly terms, you will save a few dollars if
you pay it on an annual basis. For example, a renter's insurance
policy with a $160 per year annual premium may cost you $87
on a semiannual basis. This comes out to be an extra $14 out
of your pocket.
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Make a home video of your
property and all of its contents. By doing so, you ensure
and insure -- that your claims will be paid.
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Familiarize yourself with
the additional coverage and exceptions noted on your policy.
For example, if your policy allows you to have additional coverage
on credit card losses, don't take it. Why? Because most
standard credit card companies limit you to a $50 loss per card.
That's just wasting money. Read the fine print!
Posted: May 21, 1998
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