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Savvy Homeowners should take advantage of these money-saving insurance tips

by Wayne Wargo (PenWay.org)

Homeowners' insurance is something we all need to have to protect both our home and contents and all our valuables. Obviously, a mortgage lender will not lend you money to purchase a home until you provide proof of insurance coverage for the full or fair value of the property. This is normally the purchase price. Check out these tips to make sure your homeowners' insurance will meet your current needs.

Install and Maintain A Security System Monthly or quarterly charges are very reasonable to have a security alarm. The installation cost varies somewhat as does the monitoring. A burglar alarm is normally monitored by a central station, or can be directly tied in to your local police station. Besides creating peace of mind, an added benefit is that the having such a system can help lower a homeowner's annual premium by 5% or more. The insurance company can easily be provided proof of central monitoring.

Install Additional Smoke Alarms Smoke alarms can also reduce your homeowners' insurance premiums. While smoke detectors are standard in most new houses, even installing them in older homes can usually save the homeowner 10% or more in annual premiums. Some insurance companies may give you additional discounts if you install additional smoke detectors. It goes without saying that they could save your and your family's lives in case of fire. And don't forget your pets and what they mean to you!

Increase Your Deductible Similar to other types of insurance, the higher the deductible the homeowner chooses, the lower the annual premiums will be. The catch? Smaller claims such as broken windows, minor types of vandalism, or damaged sheetrock from a leaky pipe, which will typically cost less than your deductible, will be an out of pocket expense.

Inquire About Multiple Policy Discounts Many insurance companies usually provide a discount of 10% or more to their clients that maintain other insurance with their company. Consider obtaining a quote for other types of insurance from the same company that provides your current homeowners insurance. You may end up saving money on all your insurance needs. An added benefit is that, in case of a claim, you need to call one company.

The Need to Plan Ahead For Construction projects you want to Undertake You might be considering an addition to your home for many reasons. Whether it is more room because of a larger family, to take care of an elderly parent, etc., you will need to consider the materials that will be used. Highly flammable wood-framed structures will cost more to insure, whereas cement- or steel-framed structures will cost less since it is unlikely that they will be destroyed by fire or adverse weather conditions.

Beware of Liability factors Swimming pools that are not fenced, even if your property is, can increase annual insurance costs up by 10% or more. Also, dogs that are considered dangerous should be a major liability concern. An additional 10% or more just due to these factors may be worth the extra money to you, but you have to be aware of these liabilities as well as others not mentioned here.

Pay Off Your Mortgage Obviously, this is easier said than done, but homeowners that can afford to pay off their home mortgage will most likely see a decrease in their premium. You might ask why. The simple reason is that the insurance company will usually assume you'll take better care of your home and property if you own the home outright,.

Schedule Policy Reviews It is wise to review your insurance policy annually and compare the costs and coverage of other company's insurance policies with your own. In addition, take note of any changes that have occurred that could lower your premiums, such as installing a burglar alarm, sprinkler system, etc. Changes in the makeup of your neighborhood could also affect your rates.

Guaranteed Replacement Value Insurance Another wise decision is to purchase what is termed "guaranteed replacement value" homeowners' insurance. No matter what the cost to rebuild in the event of a disaster, the policy will take care of it. As we know, the cost of building a new home does tend to increase over time and the guaranteed replacement value policies will absorb the increased cost, and thus provide the homeowner with peace of mind.

Adding An Endorsement to your policy An endorsement is simply an amendment, or add on, to the basic homeowner's policy. For example, should someone specifically want to insure certain items of jewelry, for example, this would necessitate an endorsement added to the policy. The items would have to be appraised and the appraisal sent to the insurance company to be added to the insurance contract. There is obviously a cost for this, but well worth the price since you don't want anything to happen to your items. This expedites the claims process and ensures that the homeowner gets the full dollar value of the item if it is lost, stolen or damaged in a disaster.

Annual Homeowner Warranty Protection This protection is not as well known as it should be. Normally, when you purchase a home, a homeowner warranty is part of the purchase agreement and normally in effect for a one-year term. However, there are third-party companies that offer this protection, which is normally quite extensive. Items such as refrigerators, washers, dryers, dishwashers, freezers, microwaves and even air-conditioning / central heat, etc. are covered for a one-year period. It does not matter if you have owned your home for years without and homeowner warranty protection. You can purchase this protection whenever you want. The price is reasonable. Most warranties cost on the average of $350-$500 annually. In addition, some companies provide you with a coupon for one free visit a year on any covered item. This coupon could be worth as much as $50-$75, the same as you would be charged for a normal visit.

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