Mortgage lenders require homeowners to carry homeowners insurance. There are a number of reasons for this but the most important one is that your lender will want your home rebuilt in case of catastrophe.
Proper coverage will protect against foreclosure after a tornado, hurricane, or earthquake, as examples.
Homeowner’s insurance policies are comprised of six types of coverage, generally. These six components are:
Dwelling: Covers damage to the home, and attached structures
Loss of Use: Covers living expenses while your home is in repair
Personal Liability: Provides financial protection against lawsuits from damage or injuries which occurred on your property
Personal Possessions: Covers lost or stolen goods
Medical Payments: Covers medical bills of a person injured on your property
Other Structures: Covers damage to non-attached structures
Your homeowner’s insurance policy may include some, or all, of these pieces. In general, the more coverage you keep, the higher your annual premium.
There are ways to save money on your policy as homeowners insurance can be a very expensive proposition, but it is essential.
There are several ways to reduce your homeowners’ insurance cost. You can do this by maintaining a home security system and smoke alarm.
A burglar alarm can help lower your annual premium by up to 10%. Smoke alarms are standard in most new homes, but installing them in an older home can also save you 10% on your premiums.
Another way to save is to raise your deductible; the higher your deductible the lower your annual premium.
Another tip is to look for multi-policy discounts. Many insurance companies give 10% or more if you have additional policies with them.
Did you know if you pay off your mortgage your home insurance will go down? Insurers assume that since you have paid off your home that you will take better care of it.
Senior discounts are also eligible, these are sometimes called senior discounts, age preference policies, mature policy discounts, so if you are over the age of 50, it might be worth asking if you qualify.
Finally, it is always a good idea to verify that you have all of the coverage you need, review your existing policy and assure that you have all of the coverage you need.
Homeowners insurance, like mortgage rates, varies between companies. Be sure to comparison shop for the best rates and programs which meet your household needs.
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