In my last post, I shared with you guys some things to consider when looking to save money on your Auto Insurance. As promised, today I’m sharing similar ideas for Home Insurance. I’s important to say again, don’t sacrifice the coverage you need to save a few bucks. It’s not worth it! However, you may be paying for things you don’t need and we can help you save money if that’s the case.
Deductibles
Just like I explained on Auto Insurance, the biggest way to save money is to raise your deductibles. If you are at $1,000 maybe consider bumping it up to $2,500. If you are at $2,500, consider bumping it up to $5,000. Or even better, make your deductibles a percentage value of your home (either 0.5% or 1%). Find out how much it would save you and how long you would have to go without aclaim for those savings to offset the additional risk you’ve taken on. If the break-even point is 7 years or less, DO IT!
Enhanced Packages
Many insurance companies in Nashville offer upgraded packages that have features above and beyond a standard policy. Most of these features are related to claims, such as your rate not going up if you have a claim or lowering your deductible when you do. Paying extra for this is like betting on yourself to have a claim. Personally, I bet on myself not ever having a claim. High deductibles and no perks. I’ll save money now and pay for it if I have a claim.
Added Coverages
I often find added coverages that customers have that they do not need. Ask your agent (or me) to review these coverages with you to know if you need them or not.
Building Codes
I would typically only recommend this for a home over 50 years old. If you have a new home you probably don’t need this.
Water Backup
I’ll probably do an entire postabout this later and won’t try to explain it here. The short version is if your home doesn’t have a basement or sub grade living space, you probably don’t need it. But have your agent explain it and why they think you need it.
Loss Assessments
This is only needed for Condo/Town Homes (read my article about Condo Insurance).
Identity Theft
Don’t waste your money here. The ID theft coverage offered by your home insurance typically only pays to reimburse you for legal fees if your identity is stolen. It doesn’t pay you back for what was stolen and it doesn’t monitor your credit to be proactive in protecting you. If you want this type of protection, find a separate product outside of your home insurance (likeLifeLock), to handle it.
Pay In Full
Most policies have savings for paying the year at once, and typically homes will have the biggest savings here. If you escrow your home payment, your mortgage company pays the insurance company in full, so you are likely already benefiting from this. But if you choose to pay yourself, be sure to pay in full for the year instead of monthly.
And while we’re at it… here are things you SHOULDN’T DO to save money…
DON’T Reduce Coverage
You never want to find out the hard way that you don’t have enough coverage on your home. Be sure to keep enough coverage on the Dwelling so that you could rebuild your home in the event of a total loss. Often people try to save by reducing other coverages such as Other Structures and Personal Property. Typically reducing these coverages makes very little difference in the overall price and isn’t worth bumping down.
DON’T Constantly Shop Your Rates
One factor in insurance pricing is your longevity with your prior carrier. If you’ve had the same policy for 10 years and never spoken to your agent, then yes, it’s probably time to review. But don’t change every year. You may save from company to company, but over time you’ll increase the overall cost of your policy.
DON’T Go “1-800” or “WWW”
For the past 20 years, the companies who operate online and in call centers have paid billions for ads to convince you that it’s cheaper to get your insurance that way. It’s simply not the case. Our agency acquires new customers every day from these direct insurers and often saves them hundreds if not thousands. You can buy your clothes online. Buy your groceries online. Don’t buy your insurance online.
Are you still unsure if you’re paying too much on your home insurance? Contact me and let me help. Whether you’re a current customer that just wants to improve your policy with us, or if you have another carrier and you want help comparing I’m happy to help!
