Some homeowners, especially new ones, don’t think about this additional cost and how it can take them over their budget. In fact, homeowner’s insurance is required when you get a mortgage so it is not an expense which you can skip. In order to keep the cost of homeowner’s insurance down, here are a few tips which you can follow.

Shop Around

No one really wants to spend time shopping for insurance, but it is a great way to save you a few bucks on your policy. Be sure to ask your friends who they use and you can even contact your state insurance department in order to get a complete list of agencies in your area. Of course, don’t forget to look online as well as some agencies may have more of a virtual presence than a real brick and mortar one. You can also use online quote services to help you find an idea of the price you are likely to pay.

Change Your Deductible

In order to get a better out of pocket rate each month, you may want to raise your deductible. This is the amount of money in which you will have to pay toward a loss before the insurance will begin to pay on a claim. The higher your deductible, the more money you save on the premium. For example, if you raise the deductible from $500 to $1000, you could save 25%. However, be sure to take into account where you live. If you live in an area prone to hurricanes, for example, this may not be the way to go or you may need another policy for specific damages.

Use the Same Agency

Many insurance agencies will give you a discount if you have multiple policies with them. That means if you have your home along with your cars and even your life insurance, you will wind up paying less in premiums on all your policies.

Home Security

Another way to cut down on insurance premiums is to upgrade your home security. You can get a 5% percent discount for smoke detectors, dead bolt locks and a burglar alarm. You can even get a larger discount if you upgrade to a sophisticated system that will not only call emergency services but also has a sprinkler system in order to protect your home in the event of a fire.

Credit

Keeping up your credit will also help you reduce your monthly premiums. More often, insurers are now looking at credit history and taking it into consider when writing your policy. The better your credit, the less you are likely to pay.

The main purpose of title insurance is so no one else can lay claim to your property. It will also provide future piece of mind that you will not incur any unexpected debts on your house. While you may not think that this can happen to you, it is better to be safe rather than sorry. Even if you have owned the property for years, title insurance means that the lender is reassured regarding their loan and the owner knows that they are protected from any possible problems.

There are numerous threats that can arise when it comes to property. For example, a long lost heir may suddenly materialize and claim the property, a previous owner may have taken out a loan on the property which could become the new owner’s debt, or a previous owner may have taken out a mortgage without the husband or wife knowing about it.

If any of these problems arise, a new owner may be forced to move out of the home if they don’t have title insurance. In addition, the new owner might find themselves legally bound to pay a debt on a house that is no longer yours. However, if you have title insurance than the title company will be the one to fight any battles, litigation or payments towards your case. In the extreme case you are forced to move out of the property, the title company will either pay you cash or purchase the mortgage from the lender.

While most homeowners only think about fire or flood insurance, title insurance costs very little for a lot of peace of mind. While regular insurance will allow you to keep your land in the case of your property being destroyed in a natural disaster, title insurance protects the owner if the actual house is taken away.

The nice thing about title insurance is that it will be in effect as long as you are in and own the house. In addition, after paying an initial premium there are no more fees to be paid. This is a small price to pay for the reassurance that your home cannot be taken away from you by some unforeseeable surprise that could occur at any point down the road.

Your lender should be able to show you more details on title insurance and the paperwork can be ready by the time you are ready to close on the house. While not a requirement, it is certainly worth looking into when purchasing a new home.

Create a Home Insurance Inventory

It is highly recommended that new home buyers compile a home insurance inventory very soon after they move into their home.  If you have been in your home for a while and haven’t done this yet; make it a priority.  Let us take a look at why it benefits you to have this list before loss occurs or disaster strikes:

• Adequate Coverage – Preparing this list is the only way to be sure you have enough personal property coverage on your home.  This is not something you want to learn after it is too late.
• Memory – In a time of crisis, it will be very upsetting and difficult to remember each and every item that was in your home.
• Claims – The insurance claim process will be sped up significantly if you have your home insurance inventory prepared and ready to submit.
• Tax Deductions – Uninsured loss is tax deductible.  If you have this list available, it will be much easier to determine this uninsured loss tax deduction come tax time.

Making a List and Keeping it Updated

There a couple of methods you can use to make your inventory list.  There are quite a few home inventory software packages out there now; many are built into home finance software. You can certainly go this route or perhaps even easier is to create your own simple spreadsheet.  For ideas of the items to put on your list, browse the internet as there are quite a few samples available.

In addition to listing each major item, be sure to record any supporting information about your items.  These could be serial numbers, brand names, appraisal values, how much you paid, etc.  You can gather this information from product manuals, receipts, and appraisals.  If the idea of transcribing all of this information into your list is leaving you overwhelmed, here is a trick.  Scan this information or better yet, take digital pictures of it all.  It costs you nothing; so simply snap pictures of those receipts and manuals.  This is certainly less time consuming than typing or scanning and you’ll immediately have a digital copy of it all.  Just make a note in the list next to the item that there is a supporting photograph with more details.

By having your home insurance inventory list on your computer, you will be more apt to update the list regularly.  When you buy something new, open up the list and type it in.  Or snap a picture of it if your camera is at the ready.

Pictures and Video

The easiest way to record all of the smaller items in your home is to take pictures and/or video.  Both are beneficial.  As we have seen pictures are a great way to get record the details of an item.  Video is a good backup as you are certainly not going to take a picture of every single item; the video will capture it all.  The video will also give you and the insurance company a better perspective with regards to the size of your items such as furniture, the size of your curio cabinet, how big your closet is, the size of your rock collection, etc.

Speaking of closets, remember to include all closets, drawers, contents of storage boxes as well as attics, and basements when taking your pictures or video.  Transfer these pictures and videos to your computer for easy access to them and be sure to back it all up.

Backing Up Your Inventory List

The final step in this process is extremely important.  That is to not only backup your inventory list and supporting pictures and video but to store a copy of that backup somewhere OTHER than your home.  Otherwise in the unfortunate event your house is destroyed, your list will be lost.  Places off site you may want to consider are a safe deposit box, at work, or at a friend or relative’s house.

Make your home insurance inventory list today.  When you have the completed list in front of you, take a few minutes to take a look at your home insurance policy.  Make sure you are adequately covered and make it a habit to review your policy every year.

From the resource: “Umbrella liability insurance can protect you against the catastrophic losses that can occur if you are sued. Most insurers who write auto and home insurance policies also sell umbrella liability policies.”

Source: BeamaLife

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Source: Helium

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Source: Forbes.com

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Source: HomeTips

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From the resource about paying off your mortgage to reduce your premium: “Obviously this is easier said than done, but homeowners that pay off their mortgage debts will most likely see their premiums drop. Why? It’s simple: The insurance company figures if you own your home outright, you’ll take better care of it.”

Source: Forbes.com

Read more about Saving Money on Home Insurance at Newbuyer.com

A sample from the resource: “Separate policies are needed for damages and losses caused by earthquake and flood insurance as these are not covered under standard home insurance policies.”

Source: Homeinsurance.com

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Source: Abbey Insurance

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