When was the last time you took a close look at your insurance coverage? If it’s been more than a few years, you should consult with your insurance provider to make sure you’re getting all the credits to which you are entitled. A comprehensive insurance review has the potential to result in significant savings.
Nearly every insurance company uses a credit scoring system to determine how much you’ll pay for coverage…
Understanding the Basics of Homeowners Insurance
Homeowners insurance is designed to financially protect you in the event of a covered incident, which can include theft, fire, vandalism and some weather events. The things typically covered under a homeowners policy include:
- Buildings – A homeowners insurance policy covers damage to the structures on your property. Buildings that are typically covered include your house, garage, and shed. It’s important to ensure that all the buildings on your property have enough coverage.
- Personal Belongings – Typically the items you own, including furniture, clothing and electronics. Luxury items, jewelry and expensive collectibles will need special coverage, so be sure to tell your insurance agent if you have any.
- Liability – Liability coverage protects you if someone gets hurt on your property or has property damaged while they are visiting you.
- Emergency Living Expenses – If you have to leave your home while repairs are being made, the additional living expenses coverage can provide you with cash to help you pay for food and lodging as you wait.
Where to Look for Savings
For example, in an older home, replacing an outdated heating system and rewiring may qualify you for a lower premium on your homeowners insurance. Or maybe you can save based upon your town fire department’s new, upgraded equipment. Depending on the state you live in and your insurance company, there are all kinds of discounts available.
Nearly every insurance company uses a credit scoring system to determine how much you’ll pay for coverage, and depending on the insurer, there may be 15 to 30 different credit-score tiers. So, if your credit score has improved, you may be pleasantly surprised to find you now qualify for a lower premium. In addition, you can often qualify for a companion or package discount when you use the same insurance company for both your homeowners and auto insurance.
Another area worth close scrutiny is your deductible, which is the amount you would have to pay before your insurance policy covers your loss. On homeowners’ insurance, if you can afford to fund a $1,000 loss from your own pocket, raising the deductible from $500 to $1,000 would typically cut your annual insurance premium by 10 percent. Increase the deductible to $2,500, and you’ll usually save another 10 percent. Savings on auto insurance typically are even higher.
Pick the Right Partner
Perhaps the best way to save on insurance is to work with an independent insurance broker. Because these agencies represent more than a dozen different insurance carriers, they can comparison shop and help you get the most appropriate insurance coverage at the best available rate.
