My Home Insurance Rate Went Up: What Can I Do?
Homeowners in California are finding that their home insurance rates have gone up, as much as 3% or even more, due to the wildfires that have cost insurance companies millions of dollars. However, California residents are not the only ones feeling the heat. Homeowners insurance rates are climbing in many states, often due to extreme weather, which has become the norm in many parts of the country. The good news is that even though prices have gone up across the board, homeowners insurance prices vary among insurance companies. You could save hundreds of dollars by switching home insurance carriers. There are also a few other ways to bring down your monthly or annual cost for home insurance coverage. Below, we offer some helpful tips for those of you who are struggling with expenses or simply don’t want to pay more than you have to.
- Shop Around. Each insurance company has a different way of determining rates. One insurer may quote your neighbor one price and you another, even when both homes look identical. This discrepancy is due to how much emphasis the carrier puts on one factor over another. Discounts also weigh in and determine pricing. To get these discounts applied, you’ll need to look into what kinds of discounts each insurer offers and see which you’re eligible for. Let’s face it: No one wants to spend hours shopping around. They also don’t want to pay a broker’s fee. For this reason, many people moan about their rate hike and do nothing about it. You do have an alternative. You can compare home insurance quotes without much effort. If you visit SmartFinancial, you can fill out a brief form and compare several home insurance quotes instantly, without ever lifting the phone, at least not until you decide which carrier best fits your budget and lifestyle.
- Change the Value of Your Home. We’re not suggesting that you should undervalue your home in order to pay less in home insurance because that would be foolish. However, many people wrongly include the value of their land in the overall value of the home when they buy homeowners insurance. This is also foolish because the land is not at risk of natural disasters and common perils like fire. The value you assign to your home should be based on what it would cost you to rebuild the actual home and other structures. That is all you’ll be paid out if you do experience damage to your home. You will not be paid out for the value of your land by homeowners insurance, ever. When you reevaluate the true homeowners insurance value of your home, you may save some money in insurance premiums.
- Switch. Chances are that you have the same home insurer that was assigned to you when you first bought homeowners insurance. This often means that the price of your policy was inflated. There’s no long-term binding contract with the initial homeowner policy that you bought. You can switch any time you want to switch, without penalty and without the insurance company keeping the unused portion of the premium(s) you may have paid in advance of switching carriers. They are obligated to return it, and if they don’t, you can file a complaint against your former insurer by contacting your state’s Department of Insurance.
- How High Is the Deductible? You can adjust how much you pay monthly or annually by playing around with the deductible amount. If you have it set really low, you are making higher payments on the premium. If it’s set very high, you’re paying less money each year. Keep in mind that you will have to pay whatever deductible amount that you’ve chosen, if you file a claim. By law, your insurer will not pay for your losses until you pay the deductible. Make sure it’s an amount you will be able to scrape together, in case you ever need to file a homeowners insurance claim.
- Improve Your Home. People often become neglectful of fixes that lead to major problems. For instance, if you have a 15- or 20-year-old roof, you are more likely to have a leak or worse if it has not been maintained. Reinforcing your roof or buying a more resilient roofing material may be offset with a lower home insurance policy. Replacing a worn and old roof is, first and foremost, your responsibility, so don’t expect an insurance company to pay out a claim for damages to furniture caused by an old and failing roof. You may get partial coverage but most insurers will see how worn the roof was and not give you a full settlement. They are well within their rights to determine that the damage was due to neglect. The roof is not the only component of your home to keep in mind. If you have an old plumbing or electrical system, you would be better off updating these systems. Whenever you make your home more storm resistant, more modern (no, not the decor) and sturdier, you pay less in homeowners insurance.
- Bundle. Combining your homeowners insurance with your car insurance could save you up to 20%, depending on the carrier. It’s a good idea to first start by shopping insurance quotes for a solid home insurance carrier that offers a fair price and reliable coverage.
- Make Your Home Safer. You’re probably already eligible for the standard 5% discount that comes with a smoke detector, but you can save even more, up to 25% if you employ sprinkler systems, which may prevent your home from getting ravaged by a fire, or a burglar alarm and/or home monitoring system, which will deter thieves and vandals, who run when they see cameras.
- Review the Contents in Your Home. Since you will likely be paid the depreciated value for all of your belongings, you may want to make these adjustments in your insurance policy already so you’re not paying for what you’ll never be reimbursed. For instance, let’s say you had a very expensive home gym built 10 or 15 years prior, valued at $20,000. Isn’t the equipment worn now? How much is it all worth today? Adjust it in the contents portion of your homeowners insurance policy. And make sure you have additional riders and floaters for expensive jewelry or artwork Luxury items and high-tech gadgets are often under-insured.
- Downsize. If you’re having financial trouble, it’s not a bad idea to buy a smaller and less expensive home. Since your homeowners insurance reflects the value of your house, you will likely be better off all around if you downsize or consider selling your home and buying a condo. You'll need condo insurance, which is almost the same thing as a homeowners insurance, except that you’re only covered for damages from “the walls in,” meaning you’re not responsible nor will you be compensated for damages to the condominium’s structure, only your belongings.
- Other Discounts. Make sure to find a thorough list of all the discounts the insurer offers. Each one has different factors they take into consideration. Some discounts have confusing names, which will throw you off if you don’t look more closely at what they offer. Another option is to shop for a homeowners insurance policy by entering your zip code below. Once you’re connected with an agent, compare prices along with the offered discounts, which may make a big difference in what you’re expected to pay. Happy shopping!
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At the top of the list, is reviewing insurance policies. Are you getting the coverage you need at the price you want? If not, it may be time to change policies. Need a different price? Shop around for better offers.
Gutters and downspouts work to navigate water flow off the roof so that there is no standing water that can lead to complications such as rotting wood, rotting fascia and foundation cracks
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