Tuesday, November 17, 2009

5 New Ways To Save Money On Your Home Insurance

"Top 10 ways to save money on your home insurance." I know you've seen this article a hundred times before, and it always sounds the same...raise your deductibles...shop around...get multi-policy discounts...blah blah blah. IT'S ALWAYS THE SAME, but in case you need a reminder I have included links to 5 articles that all have the same advice on lowering your home insurance premium (there are some good tips in case you've been living in a cave for the past couple of years).

Finally, there are some NEW ways to save money on your home insurance, and out of the 75,000,000+ links Google came up with, the next 5 tips weren't on any of them (that's right, I checked all of them).

  1. Check your fire protection district: Insurance companies are getting more sophisticated, which means they're coming up with new and improved ways to figure out how much you should be paying for your home insurance. One of the newest methods being used is software that determines EXACTLY how long it would take for a fire crew to respond to an emergency at your home. Unfortunately, they don't always line up the right fire departments with the right houses, causing you to pay higher premiums than you need be. Ask your agent what your protection class is. Usually, the lower the number the better. If you're near a fire department, make sure you're getting credit for it, and if you're buying a home call your agent and find out which protection class you are in.
  2. Replacement Cost Estimator: Another improvement in insurance technology has been the introduction of more sophisticated software that evaluates how much it would cost to rebuild your home in the event of a total loss (like a fire). The software itself is a good thing; the problem is that most companies do NOT have the correct information about your home. Incorrect information often leads to an increased estimate of your home's replacement cost leading to...you guessed it, higher insurance rates. Review your home's information with your agent and make sure it is correct.
  3. Check Your Endorsements: Most home insurance policies START with a lot of bells and whistles right out of the gate. I'm NOT saying to remove endorsements you need (a conversation between you and your agent), but there are often endorsements that you can remove and save money with. For example, a lot of insurance policies come with extra coverage for jewelry. If you don't have any jewelry, it's just an extra cost. Ask your agents if your endorsements are optional, and discuss which ones you need for your personal situation
  4. Update Your Home: If you're like most Americans, you used the good economy and easy HELOC's of 2006 and 2007 to do some home improvements - a new roof, new water heater or furnace, etc. Did you remember to tell your insurance agent? Insurance companies LOVE shiny new things and they reward you for putting them in, or on, your house. If you are considering doing some improvements, check with your agent to see what kind of discounts different improvements will get you. One more piece of advice, if you're considering putting on a new roof and you already have multiple layers of shingles, BE CAREFUL! Most companies are starting to dislike homes with 3 layers of roofing (dislike = no insurance) because it is an extra cost to the company to replace your roof if they first have to remove the old layers.
  5. Just Ask: Over the past few years, companies have been using new technology and more sophisticated software to develop new types of policies with lower costs. Unfortunately, most agents are too busy to call you out of the blue and mention it to you. Call your agent and ask them if there are any new policies which could save you money or any new programs that can lower your premiums. You may be surprised that all you had to do was ask.
Now for the old-school, you've heard it a hundred times, basic ways to save money on your home insurance, check out the following links:

MSN Money: 15 ways to save on home insurance
Insurance Institute: 12 ways to save money on your home insurance
Home Buyer's Information Center: 12 STEPS to SAVE MONEY on your homeowners insurance
Insure-Net: 10 ways to save money on your home insurance
Mortgage101: 12 ways to save money on your home insurance

If you read through the articles, it may have seemed like it was the same piece on different web sites, but they are all written by different folks (at least I think they are). Combine the old methods with some new ways, and you've got a great opportunity to save yourself some money.

By Robert Edgin


Anonymous said...

You are so right....When my clients call for an insurance review these are the first five steps. Thanks for putting the word out. Also, if they include insurance as part of their mortgage payment have the agent send a copy to your lender asap. Then call your lender and ask for revised payments based on the lower premium.

Robert & Titian said...

Excellent point anonymous, it's definitely important to ge the new premium to the lender so they keep the escrow where it should be. Thanks!