Home Owner’s Insurance Tips & Info

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Many people shop long and hard on insurance policies for their health and car, but often fail to compare prices just as carefully when insuring their home. New home owners often accept the insurer recommended by their Realtor or builder, and situated homeowners rarely consider shopping for a new company. But with a little research, you could save hundreds of dollars a year on home insurance.

You may be able to save even without switching companies by thinking about the following:

Consider Increasing Your Deductible

To reduce costs, carry the highest deductible possible. The higher the deductible you pay, the lower the premium costs you. You could save up to 25% by increasing the deductible from $100 to $1,000. Just make sure you have enough available cash on hand to cover the larger deductible if you need it.

Improve Your  Home Security

Most insurance companies give discounts for homes with smoke detectors, burglar alarms, dead bolts, fire extinguishers, and for those in neighborhood watch areas and alarm systems that connect to a third-party monitoring system earn even higher discounts.

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Consolidate Your Policies

You can receive “multiple coverage” discounts by using one company for all of your insurance needs.

Verify Distance From Fire Stations

Your premiums will be higher if you live more than five miles from the nearest fire station and more than 1,000 feet from a fire hydrant.

Check for available record and renewal discounts.

Is Your Home New?

See if new and renovated homes qualify for additional discounts. You may qualify for discounts if your home was built or rebuilt within the past 10-15 years.

Is Your Home Note Paid Off?

Find out if additional discounts apply for mortgage-free homes. Some insurance companies offer 5% discounts to people who have paid off their mortgage.

Mortgage lenders require borrowers to carry home owner’s insurance. But even those who own their homes outright should be insured. The typical homeowner policy covers loss or damage to the property as well as personal liability, which covers suits from injuries or illnesses related to the property. Losses under a homeowner’s policy will be paid on either an actual cash value basis or on a replacement cost basis. With the “actual cash value” method, the policy owner is entitled to the depreciated value of the damaged property. The older the item is, the less money you may receive for its replacement. Under the “replacement cost” coverage model, which typically costs more, the policy owner is reimbursed the amount it costs to actually replace lost or damaged items.

Common Coverage

The homeowner’s policy is a package that combines more than one type of insurance coverage. There are four basic types of coverage contained in a homeowner’s policy:

1) Dwelling and Personal Property
2) Personal Liability 
3) Medical Payments
4) Additional Living Expenses

How to Collect

All insurance companies operate under conditional contracts. This means that policy owners are responsible, in part, for loss recovery. In other words, if you have an insurance policy and suffer a loss, you must:

1) Notify the insurance carrier as soon as possible after a loss has occurred
2) Protect the property from further damage by making repairs to prevent further damage
3) List personal items damaged, including descriptions, actual value, and replacement cost
4) Be prepared to show an insurance company representative the claimed damage
5) Complete a statement for the insurance company, explaining circumstances surrounding the loss

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