If you’re home is being financed then your lender requires that you purchase homeowner’s insurance. But did you know that virtually all homeowner’s who own their homes free and clear continue paying for homeowner’s insurance?
People who own their own home recognize the tremendous value that their home represents and they – rightly – want to protect it. The good news is that there are several simple things that almost any homeowner can do that will lower the cost of their homeowner’s insurance almost instantly. Just be sure to let your agent know that you have done all or some of the following:
Let’s start with the basics. You want to insure your house for the full amount that it will take to rebuild it from the foundation up, and you want to include the cost of replacing all of your home’s contents – but you do not want to make the mistake of insuring the value of the land that your home sits on. The land is not going to be destroyed.
The number one homeowner’s insurance claim is not for fire damage, as many people think, but for the exact opposite – water damage. A broken water line or a bad connection to an appliance that floods a home during the night or when a homeowner is away at work is the number one homeowner’s insurance claim.
If your home is ten years old or older ask your insurance agent how much you will save each and every month if you make a one-time investment in upgrading your plumbing and your electrical system. See if the number makes sense to you. If so, then go ahead and upgrade your home.
Fire is still a major problem and there are things you can do that should lower the cost of your insurance. Clear all brush and weeds at least ten feet from any structure on your property. Buy and install the proper number of fire and smoke detectors throughout your home, and change the batteries twice yearly. Buy a kitchen-rated fire extinguisher and keep it in an accessible location. If you have a home that is more than one story add rope ladders for emergency exits in a fire or other disaster.
Burglary is also a major concern. Install motion-sensitive floodlighting around your property. Trim all bushes away from windows so burglars don’t have a convenient hiding place. Install deadbolt locks on every exterior door and make sure all windows have a working lock.
A home security system that monitors your home 24/7 for fire and burglary can save you 20% or more on your monthly homeowner’s insurance bill – but check with your agent before installing a system since not all systems qualify for the same discount on your insurance.
Also, repair or replace any broken concrete walkways on your property, fill in potholes, and replace worn or lose boards in decks and porches and replace or fix lose railings.
Your homeowner’s policy has a deductible. The larger your deductible the lower your monthly payment. Obviously you must exercise caution when raising your deductible as you must be able to afford to pay your deductible out of your own pocket of there is a claim.
[As a side note it should be pointed out that most standard homeowner’s policies in Alabama have a limitation on payments for wind damage; talk to your agent about possible remedies for this. Also, you will need to purchase a separate policy for flood damage – again, talk to your agent about your needs].
Now take what you have learned from this article and go online. Find at least 3 websites that allow you to compare prices on homeowner’s policies from different insurance companies. Enter the same information into the form on at least 3 different websites and then simply pick the company that offers the best price – assuming that you feel confident that this company will still be around in 30 years.
And your job is done! You’ve now compared low coast homeowner’s insurance in Alabama and you’ve found the lowest price that you can possibly pay and still get the coverage that you need.