Saving money is always a good thing. Sometimes, it can pay to reassess how we pay for things that we have been using for a few years. For example, when was the last time you shopped around for homeowner’s insurance or made any changes to your policy? Here are a few tips for saving money on your homeowner’s policy without leaving yourself open to the risk that your coverage will not adequately protect you from the financial effects of loss of or damage to your home.
First, it is important to determine the correct amount of coverage. You certainly want to cover your dwelling, but possessions and liability may not be as big of a priority depending upon how much you would have to pay to add them to your policy. When calculating the value of your dwelling, it is easy to just go with the appraised value. However, since that value includes the land that your house sits on, you buy more coverage than you would if you were to use the per square foot replacement value for your geographic area. Using replacement value ensures that you buy adequate coverage without spending more than you have to.
Also, be sure to pick your perils. Not all policies cover all perils. Read your policy carefully to see what is included and what is excluded. If you live in an area where a specific type of natural disaster like hurricanes or landslides happens regularly, add supplemental coverage for those threats. Things like vandalism and mold are regularly excluded from coverage. If you are concerned about these things, check to see whether you can add endorsements to your policy to cover them.
Choose a deductible that is as high as you can afford in order to keep your premium as low as possible. Also, check your rate each year. If it goes up, investigate why it went up. If after asking your insurer why your rates went up you are not satisfied with the explanation you were given, shop around.
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