Monday, 8 April 2013

Dos and don'ts of saving on home owner's insurance

Because home owner's insurance is something we all must purchase, many people mistakenly believe that what they are paying is a price that is set in stone, which they have little control over. This is simply not true. We've outlined the dos and don'ts of purchasing home insurance to help you save money.

Don't settle for the first rate you find. Shop around. It won't take you very much time, and yet the benefits will continue to pay off for you in the future. Word of mouth is one great way to find out about companies that offer their clients the best; ask your friends and family about their providers and about their satisfaction level with the rates and service they are receiving. It's a good a idea to try and find three or so providers that all sound quite appealing to you. From there, you can narrow in on the best one by choosing the one that offers you the most competitive rates.

Do raise your deductible. The deductible is the amount of money you pay towards repairing or restoring your loss before your insurance company takes financial responsibility for this. The higher your deductible, the lower your insurance rate. Raising your deductible may be difficult to do if finances are particularly tight for you. However, if you can manage it, raising your deductible—depending on just how much you can raise it by—could save you as much as twenty five percent of what you are currently paying.

Don't assume that the market value of your home is the amount you need to insure it for. The reason you should not assume this is that there are several variables that affect the real estate value of your home, many of which have little to no influence on the cost of restoring and repairing damage. For example, consider a city in which there are two identical properties: one located in a very desirable neighbourhood at the heart of the city, and one located at the outermost edge. The property with the downtown location would certainly be worth more. However, if they were both destroyed in a fire, they would both cost the same to repair, since materials and labour are really the only factors in determining that cost; the land they are situated on simply doesn't affect this. Therefore, when you are determining your coverage, do not assume that you need to pay more for a well-situated property.

Do look for package deals. Many insurance providers reward loyalty. If you go with a package that covers both your home and auto insurance needs, you will likely receive a substantial discount. In fact, many providers will reduce your premiums by as much as five to fifteen percent what you would be paying otherwise. Of course, this does not negate the need to shop around; if you are going to pursue a bundle, shop around for the best rates on combined insurance costs.

Do protect your home against calamity. Installing anti theft devices around your home is just one example of this. Other examples include reinforcing your roof, and making your home more resistant to natural disasters. This not only gives you peace of mind, but shows your insurance provider that you are a lower risk client, and that in turn will result in lower premiums.