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5 Simple Steps to Affordable Homeowner Insurance


by: Laura Horwitz
01 Dec 2010

Affordable homeowner insurance? Does that even exist? Some companies can cost hundreds of dollars more than others, but on the other hand how do you know a good deal isn't too good to be true? The trick with homeowner insurance is to find a policy that provides all the coverage you need without draining your bank account. Easier said than done, right? Wrong. Here are the top five things you need to do to get reliable yet affordable insurance:

1. Compare and contrast

Of course you're going to compare prices, but you also need to compare what each policy covers. After all, you don't want to skimp too much when it comes to protecting your possessions. You also should check out sites like the National Association of Insurance Commissioners or your state insurance department to see any complaints customers have had with specific companies. And last but not least, make sure whichever company you choose is financially stable.

2. Protect Your Possessions Yourself

If you take some simple steps to make your home more disaster resistant and increase security, then you may be eligible for discounts from your insurance company. However, not all security systems give you the same discounts, so before spending any money yourself you should talk to your insurance company. Adding smoke detectors, dead bolt locks, storm shudders, reinforcing your roof, and modernizing your heating, plumbing, and electrical systems may also get you discounts.

3. Pay a Higher Deductible

If you can afford it, then pay a higher deductible so your monthly premiums won't be as high.

4. Don't Get Confused by Additional Insurance

Make sure you know exactly what your policy covers and what might be extra. For instance, if you live in an earthquake zone, then your home insurance may charge an additional deductible for an earthquake policy. The same can be true for areas prone to floods, hurricanes, tornadoes, or hail storms. If you don't understand something in your policy, then ask for clarification. You need to know exactly what's covered and what additional insurance you need to be prepared to pay for.

5. Don't Buy Too Much Insurance: Know the Value of Your Home

When you buy a home, the price includes the land your home sits on as well. Yet that land isn't going to get stolen or burned away, so you don't need to include its cost when figuring out how much homeowners insurance to buy.

Sources:
12 Ways to Lower Your Homeowners Insurance Costs • http://www.pueblo.gsa.govhttp://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm • FCICConsumers Resources • http://www.naic.orghttp://www.naic.org/index_consumer.htm • National Association of Insurance Commissioners