Insurance World

If you own a home, then likely you have homeowners insurance on your biggest and most expensive asset. True, if you own your home outright, then there is no law requiring you to have homeowners insurance. Only mortgage companies will insist on insurance if they have a lien on your home. Is it wise to go without insurance? Should you? Keep reading and we shall look at the value of having or getting rid of your homeowners insurance.

Homeowners’ insurance rates are spiking especially for homeowners in areas where hurricane damage has been high, such as Florida. Some homeowners are finding their rates have doubled or tripled in just one year while others are learning that their policy has been cancelled by the insurance company meaning they must shop for new insurance.

The temptation to drop insurance altogether is a big one, but a dangerous choice to make unless you have a bundle of money to absorb the loss.

Home insurance makes sense for the following reason:

–If there is a catastrophic loss, then your home can be completely replaced. Just make certain that your policy has been updated to reflect the current replacement cost of your home. If you live in earthquake or a flood prone area, you will need to purchase separate insurance to cover these disasters.

You can save money on your policy via:

–Comparison shopping. All insurers are different and rates can vary by as much a 10 to 20 percent. Shop around and don’t just go with the best rate. Companies that pay a fast claim are worth more than a slower payer any day, even if there rates are high.

You are your home’s best advocate because:

–You know your home. You are in the best position to determine loss, therefore you must be aware of what is allowed or not allowed before filing for a claim. A tree that falls on your home means that you are covered, while floods and earthquakes are only covered through the writing of a separate policy.

Yes, insurance on your home can certainly seem expensive and almost worth dropping until you need to use it. Your insurance company isn’t always your best friend, but they can be your only friend when disaster hits and able to help restore you financially if you selected the policy with the best coverage.

There are several ways to reduce your Insurance Premiums, and by implementing these methods you can save yourself thousands a year.

Excess

Most claims are subject to an excess which is stipulated in your policy. If you opt for a higher excess, your monthly premiums will be less. In an average policy the excess is usually between 750 and 1000. If you make your excess 2000, you will also protect your no-claim bonus, by not claiming for small amounts during the year, which will result in your premiums being lowered the following year.

Market Value

The replacement value of goods, increases all the time. The only exception is Motor Vehicles. Make sure you car is only insured at the market value. A car you bought 5 years ago will not have the same market value today. So check with your broker or insurance company that you are only paying for the market value and that it is reduced on an annual basis. 

Specified Items

Most Insurance Companies require you to Insure specific items in your policy. i.e. - Jewellery, Glasses, Cell phones etc. Make sure that if you no longer own these items, that you have them removed from your policy. There’s no point paying cover for something you don’t own anymore.

Security

By installing the following security measures, your are reducing the risk of loss, and will result in reducing your monthly premiums.

Household
Burglar bars
Alarm System and Armed Response
Security Gates
Motor Vehicle
Alarm, Immobilizer or Gear Lock
Satellite Tracking System
No-Claim Bonus

Your monthly premiums are directly related to your number of claims you submit. The less claims you submit, the lower the premiums. Most insurance companies offer a discount on household and car insurance if no claims have been submitted. Policyholders can earn such a bonus on the basis of a claim-free history.