Unless you’re paying cash for your home the lender is going to require you get homeowner’s insurance. If you’re not careful when choosing coverage however it could wind up costing you $100 per month or more for your average New Zealand house. Happily, there are ways that you can prevent the cost of homeowner’s insurance from becoming an anchor on your life and below we’ll look at 6 of them.
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How to Keep the Cost of Homeowner’s Insurance Low
Keep these 6 tips in mind and you’re sure to get the best deal possible on your homeowner’s insurance.
- Comparison shop – On rare occasions, the first company you talk will turn out to be the one offering the best deal on homeowner’s insurance. But you shouldn’t assume that’s going to be the case. Instead, you should set aside time to shop around. Talk to a number of brokers. Compare prices on insurer’s websites. Chat with representatives through those websites. Ask friends what they’re paying. And make calls, calls, calls. In the end, you’ll be glad you did.
- Only insure what you need to – When you bought your home you paid for the house and all the surrounding land. Which means the house by itself has a lower value than the total price you paid. When insuring the house then make sure you’re not insuring the yard too. That is; if you paid $500,000 to buy the house and lot, you may only need $350,000 worth of homeowner’s insurance to cover the value of the actual house.
- Make modifications that will reduce your insurance burden – Did you know that a steel front door can reduce the amount you pay for homeowner’s insurance? Well, it can. The same goes for installing smoke detectors and a burglar alarm. You may also get a break on your homeowner’s insurance by replacing rickety old wood-framed windows with unibody vinyl replacement windows. If you have an inground pool, putting a fence around your yard can also lead to a reduction in your homeowner’s insurance.
- Raise the deductible – The lower the deductible the more you’re going to pay each month for your homeowner’s insurance. Therefore it makes sense that the higher the deductible the less you’ll pay. In fact, just by raising the deductible from $500 to $1,000 you could save as much as 25% on your monthly insurance payment. Some people won’t want to take the risk but chances are the money you’ll save over time will more than offset any increased deductible you’ll have to pay out in the event of a burglary or fire.
- Review your coverage once a year – Things lose value so you should be sure to sit down once a year and go over how much coverage you have on various items. Chances are your plasma TV isn’t worth as much today as it was a year ago. Same for your PC. Also, if you’ve sold off or donated anything during the past year – like artwork for example – make sure you’ve removed it from your coverage.
- Maintain good credit – Whether it’s fair or not insurers are increasingly relying on credit checks to help them determine how much to charge you for your homeowner’s insurance. As such it’s in your financial interest to always retain good credit. You do that by paying all your bills on time, not obtaining a dozen credit cards you don’t really need and going over your credit report with a fine-tooth comb once a year looking for errors. And if you find any, having them promptly corrected.
Homeowner’s insurance is a necessary expense but one that doesn’t have to break your bank. The key to keeping your homeowner’s insurance monthly premiums low is by being smart: don’t purchase more insurance than you need, don’t overvalue insured items, don’t insure items you no longer have, make modifications around the house that make it safer and more secure and maintain good credit. Do all of those things and your homeowner’s insurance premiums will be kept to a minimum so you have more money for things that really count; like Thursday pizza with the kids.
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