Renewing Homeowners Insurance & Saving Money
Renewing Homeowners Insurance
Our home owners insurance policy expires at the end of the month so I’ve been negotiating a new policy. I’ve watched the policy get more expensive each year since we built the house and this year was no exception. Considering the financial situation we are all in I decided to start asking some questions about why my policy was more expensive again this year.
When I asked why the policy increased in price I was told that the cost to replace the home had gone up. More specifically the woman told me that material costs have risen and caused the estimated cost to rebuild the home to increase. I had to explain to her that I really didn’t agree with that assessment based on my professional experience with building materials. At any rate I think she finally understood that I wasn’t some pushover willing to accept the party line on increased insurance premiums.
So I asked her to please re-quote our homeowners insurance policy using several insurance companies. She actually seemed a bit annoyed at me but agreed that she would take down some information and start searching for a better rate. At some point in the conversation she changed her tune and said she had another approach with my current carrier that might save me some money. She said that the insurance carrier also had a program for homes valued over $500k and it might give us a cheaper rate.
Well wouldn’t you know it, the rates came back $275 cheaper for 12 months. In addition, the new program also gave us slightly better coverage. I wasn’t done with that though. I also asked for a quote to change my deductible from $750 to $2500. For me this isn’t such a big deal when you consider that most people never make a claim on their insurance. And, if we need to, $2500 isn’t going to financially ruin us. That change in the policy reduced the premium another $200.
My point here is that spending just under an hour on the phone with my insurance broker, I was able to shave $475 off of our yearly homeowners insurance policy! The deductible was a no brainer for me. Especially when you consider that most claims are made for tree strikes and floods. Our house doesn’t have a tree within striking distance and our basement is a full walkout with little chance of flooding.
So next time your policy needs to be renewed, take a few minutes and call your broker. Find out if there are ways you can reduce your premium and save some money.
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Thank you for this useful post. Really appreciate it. I found your blog through google. House insurance is a really a debatable issue under this economic down slide. Liked your blog a lot and I have bookmarked it as well.. And I would sharing with my friends on facebook. Cheers mate.
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Also, make sure you know WHAT you’re covered for and what is excluded. And, at WHAT PERCENTAGE!
I recently found out that we are only covered to 80 percent of rebuild cost. When we renew this summer, I plan to change that.
@ Nicole – VERY good point. Today it’s very important to have a complete replacement policy (in my humble opinion). Without that coverage you may be left paying for demolition of the old structure, clean up, and then a smaller percentage of actual costs. For the small difference in premium it’s hard for me to see why you wouldn’t go the extra mile on your coverage.