CHARLOTTE, N.C., March 11, 2008 – As with most financial decisions, it pays to make an informed decision. When you are shopping for homeowner’s insurance, keep the following ideas in mind and discuss them with a company representative.
How to compare policies – You may be tempted to focus on cost alone, and look for the cheapest rate you can find. But actually, being underinsured in the event of a disaster can be a much bigger expense than having adequate coverage, so don’t skimp. Look for a reputable company with a good service record. Consider the deductible – the amount you have to pay out of pocket in a given year before the insurance benefits kick in. Usually, the higher the deductible, the lower the cost of the insurance; but be realistic about what you can afford to pay in the event of a claim.
Discounts for bundling policies – Some companies offer discounts if you have more than one policy with them, such as auto insurance in addition to your homeowner’s policy. As you are shopping, add any discounts to your calculation and consider switching your auto insurance if that will save you money overall.
Discounts for new construction – See if your insurance company has a program for new construction, or if they’d be willing to give you a break on the price of your policy. A new home is less likely to need a maintenance claim since all its systems are new.
Safety and security discounts – The cost of a policy may go down with the addition of smoke detectors and burglar alarm, and the savings could be significant if you also have a sprinkler system and a monitoring service. But it’s worth it to weigh the cost of a potentially expensive installation against the potential savings on insurance premiums.
Smoker’s penalty – In addition to paying more for health insurance, smokers can pay more for homeowner’s insurance too, since cigarettes account for more than 23,000 house fires a year. If you are a non-smoker – and no one else in your household smokes - ask about a discount.
Group coverage – Alumni and trade associations are attractive markets to insurance companies. Check with any associations that you are a member of to see if there are any discounts available to you.
Discounts for longevity – Some insurers reduce premiums to long-term customers.
Reassess your insurance annually – A great way to save money is to re-evaluate your insurance needs every year. For instance, check the policy limits on your possessions: if your policy covers significantly more than the value of your possessions, you may be paying too much.
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