Homeowners Insurance Part II. Lower your premium!

In a post last week we discussed Homeowners Insurance. We focused on the parts of the home insurance policy and how it works. Today's post is part 2 of this segment. As we mentioned last time, you get what you pay for so don't focus solely on price. While this is true, there are ways to keep your premiums as low as possible. Everybody wants to keep their house payment low and if you escrow, your insurance premium plays a part in this. Some people bounce around from company to company searching for the lowest price at their renewal date. I am not a big fan of this. You don't develop any loyalty here and this could come back to haunt you if you have a large claim. Many times there is a reason why 1 company is drastically cheaper than all the others. State Farm, Allstate, etc. have been pricing their business for a very long time and have it figured out. You'll find a company come out with a super low price one year and then they run into financial trouble. You want your insurance company to be financially sound. After all, you are counting on them to be there for you. With this being said it is ok to shop occasionally, especially if you think your price is getting out of hand. This will keep them honest. Now just like last week, let me again mention an important disclaimer. I was an insurance agent for 5 years, but I am no longer licensed. All of this information is solely to help you wrap your mind around this subject and better educate you. Be sure to consult an insurance professional to find out any new details that pertain to their specific company and any industry wide changes that may affect any of the following information. With that being said, here are some tips on keeping your home premiums down:

1. Multi-Policy Discount - Insure your auto, home, and life insurance together. By doing this you will earn a multi-policy discount.

2. Raise your Deductible. - Go with a $1000 deductible. This keeps your premium down. Just make sure you are comfortable with the $1000. Also see what a $500 deductible costs .The larger the home the more difference it makes, therefore a higher deductible may not always make sense. Home claims are fairly rare and usually if something is claimed , it is a high dollar amount. Therefore, the $1000 is small relative to the damage. It also helps fight off your urge to claim something minor that could come back to haunt you down the road.

3. Home security system - By having an alarm you are eligible for a discount. It is best to have a full-reporting alarm to maximize the discount you receive. Keep in mind the cost of the alarm is more than what the discount will save you. If you already want an alarm, just realize this helps justify the price you pay for it.

4. Affinity Marketing Discounts - Ask your insurance company if they offer any Affinity Marketing discounts. Liberty Mutual is the leader in this field as they offer over 8500 different group discounts. In Columbia The University of MO Alumni Association and Missouri Credit Union are big ones. BMW and Onstar are a couple others that used to be in the fold. If your are a member or affiliated with these companies you can get a discount through Liberty Mutual. Met Life is another company that does this and there may be others, just ask. This can save you up to 15% on top of any other discounts you already receive!

5. Loyalty counts - I mentioned loyalty earlier. Some companies offer loyalty discounts or loss forgiveness programs for your years of continued coverage. Ask what programs they have in place. Keep all of these things in mind when looking to improve your premium. These perks can end up saving you more if you ever need to use them.

If you are looking to buy a new home, here are a couple things to be aware of that can potentially cost you money and give you a headache!

1. Location of the nearest fire hydrant and fire station. - If you are in the city limits this won't be an issue. If you are not, then pay attention. If you are over 1000 feet from a hydrant or over 5 miles from a station, you will pay significantly more for home insurance! Some companies won't even insure you!

2.Dogs - If you own a Pit Bull, Doberman, German Shepard, or other dangerous breed you may have some issues obtaining home insurance.

3. Prior claims on the residence - If the home has a history of water problems or claims,you will want to know. In some instances you may need special approval and this can affect your future rates. Insurance companies have different rating policies, so get all the information available to help avoid surprises in this area. Not to mention that if there is past water issues with them home you will want to make sure they are taken care of anyway! Nobody wants these items coming back! Your insurance companies claim search is another way to make sure the seller isn't hiding something.

Hope all of this information helps!

Brought to you by:
Flat Branch Mortgage, Inc.
Posted by: Eric Hemmer