Owning a house comes with many responsibilities. You have to maintain the home, pay taxes, and in most cases, make monthly payments on your mortgage. Then there’s also the cost of home insurance.
When it comes to reducing your monthly billable costs and going for a more frugal approach in life, there’s only so much you can do to reduce your mortgage – and even less you can do to make sure your house is well-maintained affordably (either through time or money invested) – so you turn to the homeowners policy.
Now, we all know the advice people give when it comes to finding the right insurance provider. Shop around, ask questions, clean up your credit and so on and so forth. But what if you already have an insurance policy? What if you’ve shopped around, and gotten the best deal you could find? Is there still a way to further cut down on costs?
In short, the answer is: probably. But to really get into it, you’ve got to ask a few questions. To help you along on your quest for more affordable – and smarter – home insurance, here’s an extremely simple list of five questions you should ask yourself.
Am I Missing Any Floaters?
Floaters are basically insured extras – items not included within your regular comprehensive insurance policy, such as jewellery or expensive kitchen appliances and electronic devices. If you’ve sold anything that your insurance policy counts as outside your regular insurance, or if the value of an item has been reduced – as is very common in the electronics and appliances markets – then contact your insurance provider and make sure that you reduce or eliminate these extra costs.
Being underinsured can be tragic when you’re caught up in the experience of a real serious disaster or accident. But being over-insured is senseless. It’ll cost you unnecessary amounts of money on a regular basis.
Am I Managing My Deductibles?
When it comes to insurance, insurance companies reward you if you take on more of the financial risk in the case of a real disaster. As such, insurance policies come with deductibles – a deductible is a fee you pay in case of a disaster, used to help the company cover your costs. So if you get a $1000 deductible on your home insurance, then you save a lot more money paying less in monthly premiums than someone who had the same plan but is only pledging $500 as a deductible.
In some cases, insurance companies consider a single deductible to be deducted from one insurance coverage point – so in the case of comprehensive coverage against storms, earthquakes, fires, burglary and so on, you may have to pay a separate deductible for each. Doing so will drastically lower your premiums. Just be sure you can afford your deductibles.
Is My Home Safe?
If you’ve recently installed some kind of alarm system, or storm shutters, or other house modifications that shield you against the damages of burglary, winds, earthquakes and fire alike, then contact your insurance provider to discuss changes in your policy. A change made to the home for a better means that you become less of a risk – and that decreases your monthly premium costs.
Some basic ideas to make your home safer include a deadbolt lock, smoke detector, and a more fire-responsive sprinkler system. Now, remember – since we’re trying to be frugal here, you’ll want to go for the more affordable installations. That doesn’t mean buy a cheap alarm or sprinkler system – rather, stick to what you’ve got, and invest in a really solid lock. Not only is it wiser, but it’s also more cost-effective.
Disaster-proof your home as well by replacing the shutters, reinforcing the roof and modernizing your home’s electrical wiring and plumbing. This can go a long way to prove to an insurer that you’re not as much of a liability.
Am I Getting All the Right Discounts?
Do a write up. Homeowners who recently renovated and upgraded their homes to be safer and more disaster-ready are applicable for reductions in their premiums.
According to the IRS, a mortgage homeowners insurance is tax deductible as well if your lender asked you to take on homeowners insurance – which most lenders do.
That’s all there is to it – now you just have to translate these words into action, and you’ll lighten your financial burdens.
Questions for Discussion: How else do you save on homeowner’s insurance? What safety upgrades have you made to your home?
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