Is finding cheap homeowners insurance a myth in much the same manner as Bigfoot and the Loch Ness Monster? It is possible to avoid spending more than you have to for this type of insurance coverage; whether homeowners will consider it cheap is a matter of opinion. If you have good understanding of homeowners insurance, you will find it easier to get cheap rates.
Cheap Homeowners Insurance: Types of Coverage Available
Homeowners insurance includes a number of different types of coverage. Check to see if the insurance policy you are considering covers the following:
- Liability: The liability portion of your homeowners insurance policy covers you if someone is injured or suffers damage to property while on the premises and you are at fault.
If you are sued for damages, your insurance policy will cover the legal fees involved in defending the action and pays medical and other expenses to the injured person.
Don’t skimp on this kind of coverage; your policy will pay for damages up to the policy limit only. Any money owed over that amount will need to be paid by you personally.
- Structural: This portion of your policy pays out if your home sustains damage or is destroyed. A building contractor or a real estate agent will be able to give you some idea about the average cost per square foot to build in your area. Multiply this number by your home’s square footage to get an estimate for the amount of coverage you need.
Since building costs increase over the years, you will either want to review your level of coverage on a regular basis or ask whether your insurance policy increases the level of coverage by a certain percentage automatically over time.
- Personal Property: Along with your home’s structure, you also need insurance for your home’s contents. This will include your appliances, electronics, furniture, and clothing. To determine how much coverage you will need, make a list of all of these items and then do some research to find out how much it would cost to replace everything. (You may be surprised at the number you come up with.)
- Off Premises: If your home is damaged to the extent that you are unable to live in it while it is being rebuilt or repaired, your off premises coverage will help to pay for your living expenses (accommodation and meals) until you can move back home.
Cheap Homeowners Insurance: Policy Exclusions
Most homeowners policies do not provide coverage for damage caused by floods or earthquakes. If you live in an area where you are at risk for one of these events, you will need to find a separate policy that specifically covers them.
How To Find Cheap Homeowners Insurance
Here are some suggestions for getting cheap home insurance:
- Shop Around: Rates for homeowners insurance vary greatly depending on the insurance company. One great way to get a better rate for your coverage is to shop around. Even if you are happy with your current insurance company, it does pay to compare policies to see if you can get a better deal elsewhere.
- Multiple Policy Discount: Many insurance companies will give a discount if you have more than one policy. Find out if the same company that insures your vehicle also provides insurance to homeowners, and how much of a discount it will offer you.
- Learn About Your Own Home: Finding out about the materials used to build your home may help you save on your insurance rates. You also want to be able to tell the insurance company accurate information about how old the plumbing and wiring is. This information can affect the rates you are charged for coverage.
- Pay Off Your Mortgage As Soon As You Can: Most mortgage lenders insist that you carry at least enough homeowners insurance to cover the cost of the mortgage. Once the mortgage is paid off, the insurance company assumes that you will have the funds to keep the property in good repair and your insurance rates may drop.
- Increase Your Deductible: When you choose to carry a higher deductible on your homeowners insurance, your monthly premiums drop. Just be careful when you choose your deductible; you need to be sure that you are able to cover this amount if you sustain a loss.
Cheap Homeowners Insurance: Cancellations And Non-renewals Of Coverage
Your homeowners insurance will not be renewed if you allow the property to deteriorate to below a certain level. You will also lose your coverage if you file multiple claims (usually three or more) that are not the result of damage caused by a storm over a certain period (three years or less). The insurance company may give you a set amount of time to bring your home up to acceptable standards and then renew your policy.
If the insurance company has decided not to renew your policy, you must be given at least 30 days notice of its intention not to continue insuring you. You must receive this notice before your policy expires. If you are not given sufficient notice, the company must renew your policy if you request it.
In a situation where you will be away from home for an extended period of time, you may find that your insurance coverage has lapsed. Again, check your policy if you won’t be in residence for some time and find out what you can do to keep your coverage current.
You do have the option of canceling your homeowners insurance, as well. Be sure to check your policy provisions to see what procedure you need to follow to do this. Some insurance policies specify that notice must be given in writing, for example. Don’t cancel your existing policy unless you have arranged for coverage elsewhere; the last thing you want is to be without coverage if an unfortunate event occurs.
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