You receive an envelope from your home insurance carrier, open your invoice and GASP! You’re sitting there wondering why on earth you pay that much for home insurance? What determines homeowner’s insurance premiums and what can you do to decrease the cost of yours? Take a look…
Where do you live?
Location significantly impacts homeowner’s insurance rates, and when it comes to Florida, homeowners don’t catch a break. According to the National Association of Insurance Commissioners, Florida has some of the most expensive home insurance premiums in the nation.
Why is this? Unpredictable weather conditions like hurricanes, floods and sinkholes increase risk for insurance companies.
Florida’s relatively expensive homeowner’s insurance rates can be attributed to the moderate to high risk of hurricanes and sinkholes throughout the state. Homes located near the ocean may see increased premiums to compensate for the elevated risk.
What is your deductible?
Does your current insurance policy have a high premium with a low deductible? With most insurance policies, including homeowner’s, increasing your deductible generally lowers your overall cost. According to the Insurance Information Institute, switching your deductible from $500 to $1,000 can save you up to 20% on your home insurance premium.
Are you paying for more coverage than you need?
When was the last time you reviewed your homeowner’s insurance policy? Things can change over the course of a year. “All too often, people pay for coverage they don't need, and even for items they no longer own,” says Amy Bach, executive director of United Policyholders.
Your insurance coverage should be large enough to cover the cost of rebuilding your home if it is destroyed. If you have made improvements to your home, built new buildings on your property or completed any other major renovations, then the value of your home may have changed.
If you are in this situation, you will want to either increase coverage under your current policy or shop around for a new policy with coverage that meets your needs.
While you are reviewing your coverage needs, take a few extra minutes and conduct a home inventory. This will help you identify any valuables that require additional coverage or equipment that could impact your coverage. Here are some tips on photographing your home’s valuables.
How does your insurance premium compare?
Are you spending considerably more on your home insurance policy than your neighbor? One of the best ways to determine whether or not you’re paying too much is to compare the price of your policy against that of similar companies.
Do keep in mind that price is not the only thing you should account for when comparing policies. Just because a home insurance company is cheaper does not necessarily mean it’s the best policy for your needs. Verify that your policy is the best value, balancing a competitive rate with quality service and coverage. Some home insurance companies offer online quote request services to help you compare policies and rates.
Policyholders oftentimes opt for quality and financial stability over saving a few extra bucks each month. In the end, you need to know that you can count on your homeowner’s insurance company when you need them most.
Are you taking advantage of discounts?
Most homeowner’s insurance companies offer discounts to policyholders that are considered “low-risk.” As a homeowner, there are several steps you can take to help safeguard your home against potential hazards, such as smoke detectors, security systems and wind mitigation.
If you’re already taking any of the steps mentioned above, make sure your homeowner’s insurance company is aware to ensure you are receiving the discounts you deserve.
Are you paying too much? Find out by requesting a quote from People’s Trust Insurance now.