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So,
you've resolved to reduce expenses this year. Fortunately, this
resolution may be easier to keep than you think. Take another look
at your homeowners insurance. In many
states,
companies offer policy discounts, credits and reductions. To trim
costs, combine insurers' inducements with smart strategies.
Inquire
about Discounts. Ask if you qualify for any of these types of premium reductions:
New
Home:
If your home is less than six years old, you may be entitled to a
discount. Some insurers will slash 8% to 15% off the premium.
When
shopping for a home, keep in mind that companies consider various
factors when evaluating a home's eligibility for a reduced rate.
These may include the home's proximity to emergency
services such as a fire hydrant or fire station, type of
construction, location and age.
Companion
policy:
Insuring your home with the same company that insures your life or
car may entitle you to a discount. Some companies reward customers
by cutting the premium 5% to 15%.
Protective
device:
Depending on the type, a fire or burglar alarm or sprinkler system
installed in your home may generate a premium discount. Before
purchasing an expensive
system,
check with your insurer; not all systems qualify for the discount.
Then weigh the cost of an approved system against the expected
savings on the premium.
Mature
homeowner credit: Retirees age 55 or older may be eligible for this credit.
Companies realize that retirees tend to stay close to home. As a
result, homes are better
maintained,
and a potential loss, due to fire or burglary, could possibly be
averted by a quick response. Some companies reward seniors with as
much as 10% off.
Secured
community credit: Residing in a fully secured (entry protected on a 24-hour basis)
or partially secured (card activated entry) community may be all you
need to take
advantage
of this premium credit.
Home
improvements: Making improvements to your home, such as upgrading plumbing,
replacing roofing, decreases the possibility of a loss and just
might give you a greater return than
you imagined, a reduced premium.
Lifestyle:
With
23,000 smoking-related fires a year, companies tend to reward
nonsmokers with a 2%-5% discount.
Loyalty
discount:
In recognition of their customers' loyalty, some companies reduce
premiums by 5% after three to five years and by 10% after six years
or more.
Resist
over-insuring. In the end, it only inflates the premium. The Better Business
Bureau suggests that you determine how much your home and
possessions are worth. Start by
itemizing
your possessions then have an agent help you estimate the cost to
rebuild your home. Also, don't make the mistake of insuring the
land. Although your home could succumb to fire and other calamities,
the dirt will remain.
Increase
your deductible. Low deductibles cost plenty. By raising the deductible from $250
to $500, you may rack up 12% in savings; increase it to $1,000, and
you could pocket up
to 24%. And a $5,000 deductible may reduce your premium by up to
37%. Keep in mind that savings vary, depending on the insurer.
A
word of caution: Before opting for a higher deductible, check with
your mortgage lender. You may be required to carry a low deductible.
Consider
an inflation guard endorsement. Your coverage will be automatically adjusted to
inflation each year. If you elect this coverage, check with your
agent that the amount
of
increase accurately reflects the cost of replacing your home. If it
does not, increase or decrease the coverage as needed.
Compare
companies. Take advantage of the competitive environment insurance companies
operate in. Discounts vary from company to company and from state to
state. Obtain
three
written estimates on comparable policies and services.
Look
into group plans. Alumni associations and professional organizations often procure
group discounts for members. See if one of your memberships offers a
discounted rate
in
homeowners insurance.
If you have questions about this or any other
home buying or selling subject, confer with the real estate
professionals who can help provide you with more detail…
We
can be reached at (310) 265-2130
Prudential California Realty is an independently owned and operated
member
|of The Prudential Real Estate Affiliates, Inc., a Prudential
Financial company.
Equal Housing
Opportunity
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