Home Insurance Tips That May Help You Save Money

Buying insurance for your property and its contents may be a necessity for you but this doesn’t mean that you don’t have ways of making this process more cost effective. There are a variety of home insurance tips that may cut the costs of the prices you’ll be quoted whilst making sure that you have the right kind of cover.

Let’s take a look at some of the more popular home insurance tips.

  • Think about your needs — some people (usually homeowners) may need both buildings and contents insurance. Others may just need contents insurance. If you rent your home, for example, then your landlord is typically the one that has to deal with repairs to his/her building. So, buying this cover is not always a necessity in this case. If you own your home, then it typically will be.
  • Insure for the right amount — some people make mistakes when taking out home insurance and under insure or over insure. If you don’t take out enough cover then you may not be able to claim enough to cover your costs. If you take out too much cover then your policy payments may be higher than they strictly need to be. Building insurance is meant to be based on the rebuild value of your home and contents cover is meant to be enough to cover all of your possessions.
  • Home security — insurance is a question of risk and spending some time on improving your home security may make you look to be a lower risk to an insurance company. This may cut the costs of your premiums. Having things like alarm systems, decent door locks, window locks and smoke detectors may all count in your favour. Being a member of a Neighbourhood Watch scheme may also be a benefit to some insurers.
  • Look at the excess — this option may not suit everyone but it may keep premium costs low. Whenever you make a claim on a home insurance policy you have to deal with the excess agreed in it. This excess is the sum of money you have agreed to pay before the insurance company starts to cover costs. So, for example, if your excess is £100 then you pay the first £100 of any claim at which point your insurer takes over. If you voluntarily ask for a higher excess sum then you may find that your policy costs decrease a little. So, this may be worth checking out before you choose a policy.

These home insurance tips may help you save money on the costs of a policy. It is still important not to have cost savings as your primary focus to start with however. Putting the right kind of policy in place is just as, if not more, important.

Once you have done that by using these home insurance tips then you are ready to look at getting a really cost effective policy. Bear in mind that a home insurance specialist provider may be a good place to make a start. This may save you a lot of time and money as they may be able to compare quotes for you to show you your cheapest options.

Home Insurance Tips For First Time Homebuyers

Once you have found that special house for your first home then comes the bewildering buying process. Choosing the insurance required by your mortgage needs attention but is often overlooked during this unfamiliar process. Don’t shortchange this important protection of you new home. It is important to step out of the quick sale agenda of the home seller to understand what insurance you are buying, customize the insurance package and make you own selection of insurance company.

What is the “Hazard Insurance” that our mortgage bank is requiring?

For most situations, the “Hazard Insurance” coverage will be provided by a Homeowner’s Insurance policy. The mortgage bank’s concern is with the protection of their collateral (your house) from hazards of fire, lightning, tornado, etc. Your Homeowner’s Insurance policy includes coverage for these risks on your house but goes well beyond the banker’s requirement to include coverage for your possessions, loss of use and more.

What other insurance is being required?

Your mortgage bank may also be requiring Flood Insurance if your house is in a “Special Flood Risk Area.” In Texas, if your new house is located along the Gulf Coast your mortgage bank may also be requiring Windstorm Insurance.

How much insurance does our new house need?

The mortgage bank is looking for enough insurance to cover the loan. Often, a higher or lower amount of coverage is more appropriate. Your purchase includes the land, site improvements (fences, driveway, etc.) and your house. Figuring out a reasonable amount of insurance for the house is part of my job. Having an adequate amount of insurance to rebuild your house is important. At the same time, too much insurance is not a good value.

Why is buying your home insurance from a professional important?

Buying home insurance is far more than just meeting your mortgage hazard insurance requirement. Getting the right amount of insurance for your house, ample to rebuild but not more than is needed, is critical. An insurance professional can guide you to appropriate contents coverage and liability protection. While neither is a mortgage requirement, it is still important to you as the homeowner.

What insurance company should I choose?

Your mortgage banker or home seller likely will have a suggestion. My experience with letting the banker or home seller select a home insurer is, at best, mixed. Their key concern is selling you the mortgage and the house. Their focus is not on the long term viability of the insurer or service down-the-road. A couple of years ago, Texas Select Lloyds, then the sixth biggest home insurer in Texas, was suddenly shutdown by our Texas Department of Insurance – they had been a favorite suggestion of several of our local home builders for several years.

How can I reduce the cost of my Home Insurance?

Cost is important on any purchase including insurance. Buying a companion auto policy from the same insurance company often provides a 10% discount on both insurance plans. Choosing a higher deductible is a trade-off in risk but can reduce insurance cost. If you decide to have a monitored burglary alarm, be sure to ask for the insurance discount. Other discounts may be available. Too often I see first time home buyer overwhelmed by the buying experience while allowing important insurance decisions to be inadequately considered. Getting help to understand your home insurance choices is easy; call your insurance agent. If you don’t have a relationship with an insurance professional, this is a good time to start one.

David W. Crump, Ross Gray Insurance Agency

I specialize in Business, Health and Personal Insurance sales and service.

Home Insurance Tips For First Time Homebuyers

Once you have found that special house for your first home then comes the bewildering buying process. Choosing the insurance required by your mortgage needs attention but is often overlooked during this unfamiliar process. Don’t shortchange this important protection of you new home. It is important to step out of the quick sale agenda of the home seller to understand what insurance you are buying, customize the insurance package and make you own selection of insurance company.

What is the “Hazard Insurance” that our mortgage bank is requiring?

For most situations, the “Hazard Insurance” coverage will be provided by a Homeowner’s Insurance policy. The mortgage bank’s concern is with the protection of their collateral (your house) from hazards of fire, lightning, tornado, etc. Your Homeowner’s Insurance policy includes coverage for these risks on your house but goes well beyond the banker’s requirement to include coverage for your possessions, loss of use and more.

What other insurance is being required?

Your mortgage bank may also be requiring Flood Insurance if your house is in a “Special Flood Risk Area.” In Texas, if your new house is located along the Gulf Coast your mortgage bank may also be requiring Windstorm Insurance.

How much insurance does our new house need?

The mortgage bank is looking for enough insurance to cover the loan. Often, a higher or lower amount of coverage is more appropriate. Your purchase includes the land, site improvements (fences, driveway, etc.) and your house. Figuring out a reasonable amount of insurance for the house is part of my job. Having an adequate amount of insurance to rebuild your house is important. At the same time, too much insurance is not a good value.

Why is buying your home insurance from a professional important?

Buying home insurance is far more than just meeting your mortgage hazard insurance requirement. Getting the right amount of insurance for your house, ample to rebuild but not more than is needed, is critical. An insurance professional can guide you to appropriate contents coverage and liability protection. While neither is a mortgage requirement, it is still important to you as the homeowner.

What insurance company should I choose?

Your mortgage banker or home seller likely will have a suggestion. My experience with letting the banker or home seller select a home insurer is, at best, mixed. Their key concern is selling you the mortgage and the house. Their focus is not on the long term viability of the insurer or service down-the-road. A couple of years ago, Texas Select Lloyds, then the sixth biggest home insurer in Texas, was suddenly shutdown by our Texas Department of Insurance – they had been a favorite suggestion of several of our local home builders for several years.

How can I reduce the cost of my Home Insurance?

Cost is important on any purchase including insurance. Buying a companion auto policy from the same insurance company often provides a 10% discount on both insurance plans. Choosing a higher deductible is a trade-off in risk but can reduce insurance cost. If you decide to have a monitored burglary alarm, be sure to ask for the insurance discount. Other discounts may be available. Too often I see first time home buyer overwhelmed by the buying experience while allowing important insurance decisions to be inadequately considered. Getting help to understand your home insurance choices is easy; call your insurance agent. If you don’t have a relationship with an insurance professional, this is a good time to start one.

Home Insurance Tips to Help You Make Savings

There are many ways that you are able to save money on home insurance. One of the many home insurance tips for getting the best deals is to allow a specialist broker to search around on your behalf. You can then go through the key facts of each policy they find and compare to get the most suitable insurance policy for your needs.

Another of many great home insurance tips when wanting to save money on insurance is to offer to pay more out in excess on the policy. The excess is the amount the provider would ask you to pay towards an insurance claim before they will payout. For example if you have to make a claim for £250 of damage or loss and you were paying an excess of £100 the insurance company would then payout for the remainder which would be £150.

The more secure your home is the less chance of you being a victim of theft so the cheaper the insurance premiums might be. You could install a good quality alarm on the property; fix deadbolts on the doors and window alarms on the windows. Good high fencing around the property can also help towards keeping down the cost of the insurance. Installing such as fire alarms could also help to keep down the cost of insurance as with alarms fitted there would be less chance of fire destroying your home.

When taking out home insurance the premiums are worked out on how much you choose to insure. Therefore you do not want to take out insurance that is grossly over estimated. To get an accurate idea of how much to insure against you would have to go around your home and jot down the cost of items. Do not forget to look in cupboards, wardrobes and your loft and count all items however small as they all add up.

Home insurance can be taken out as home contents insurance and buildings insurance. While contents insurance protects your belongings in the home, buildings insurance would protect the shell of the home. Mortgage lenders will usually insist that you take out buildings insurance to cover the shell when they provide you with the mortgage. Often if you take out both forms of home insurance together you can make huge savings as opposed to searching around and taking out cover with different providers.

Look into whether your neighbourhood has a neighbourhood watch scheme. If it has then it can be worthwhile becoming a member. If not then you could look into starting such as scheme. If there is a scheme in place this can deter thieves and as you would be seen to be living in a safer neighbourhood this could help to keep the cost of the premiums down.

Finally another of the valuable home insurance tips to consider is to check the policy over with a fine tooth comb. There will be limits and exclusions in all home insurance offered by all providers. It is essential that you know what is and is not covered in your home insurance to avoid any nasty surprises if you should have to make a claim.

Using Home Insurance Tips to Cut Premium Costs

Because insurance in all of its forms involves a regular cost to the policyholder, it can often go down on the long list of household bills which can be more or less concerning depending on someone’s circumstances. If somebody were to get the best deal possible from the outset, cover for the home can essentially take care of itself up until the time comes to renew a deal. In effect, with a little homework and by following some basic home insurance tips, somebody could make sure that this basic cost is as low as possible.

Unfortunately a lack of basic understanding can actually see somebody end up with a policy which in part is actually more than they need. For example, that term home insurance itself generally prefers to two basic types of cover – buildings insurance and contents insurance. In reality not everyone needs both, as people who are renting a property, for example, may not need protection for the building, but simply for their contents, or their general belongings. Likewise, somebody who owns a building but rents it out may not actually need contents insurance, or only a low level of it.

As such a home insurance policy may be completely unnecessary for somebody who is renting, if it includes protection for the building. People who are buying a home and are applying for a mortgage may often find that they are offered a Home Insurance plan by the bank or building society which is supplying them with the lending. This is because the vast majority of mortgage providers require that the applicant has a form of buildings insurance in place.

While taking this offer may seem sensible and convenient, in reality what the lender is offering you may be poor value compared to other standalone policies offered by independent cover companies. Remember that you’re entitled to turn down the offer of insurance which is made buy a home loan provider, it is wrong to assume that you will be refused lending if you reject their form of insurance.

Other home insurance tips include taking particular care over what is and what is not covered on any potential policy. While it’s true that most deals protect against fire, flood, and vandalism, plus theft in the case of contents, flooding in particular may be more expensive as an option depending on where the house itself is. Certain flood risk areas in the UK mean that getting protection for these homes is more expensive or almost impossible.

If you are putting buildings cover in place, it can be worth bearing in mind that you may be putting yourself at risk if you are looking to improve the home yourself. For example, some insurance companies will not pay for damage which is caused by DIY improvements, such as a botched home attempt at an extension, for example. If you are keen to do a fair amount of work on the house yourself, ensure that this will be covered – many companies require that whoever is carrying out the work is a qualified tradesman.

When it comes to contents, it is safe bet that significantly improving your home security can bring down your premium. Remember that insurance is essentially an industry which bases its costs on risk. You can reduce the risk or chance that your home is broken into, you may be able to reduce your insurance premium. Fitting a burglar alarm, installing a certain type of lock on the doors and fitting security lights are all home insurance tips which can potentially cut the cost of contents insurance.

A Few Home Insurance Tips

Presuming to offer home insurance tips needs to be done with some caution, since every home and every homeowners needs and circumstances are, of course, quite different. Nevertheless, there are a few basic principles probably worth bearing in mind whether your search is for buildings insurance, contents cover, or both.

  • Price– many people might be tempted to go for the lowest price possible. Whilst low-cost home insurance is certainly available, the more important measure – even with such low-cost insurance – is the value for money it offers. This means getting the level of protection for the building itself and all the items that need to be covered for the most competitive price. This, in turn, requires a fine balance between overvaluation and paying too high a price for the premiums – over-insurance – and the probably greater peril of under-estimating the value of your property and its contents in order to pay less in premiums – under-insurance;
  • Set-limit cover– some insurers have taken the uncertainty out of this balancing act by offering set-limit cover on both buildings and contents insurance. High on the list of home insurance tips, therefore, might be the opportunity of avoiding the risks of over- or under-insurance by choosing the set-limit option. These competitively priced policies typically provide all the cover you need up to an agreed limit on either buildings or contents (for example, up to £1 million on the building and £60,000 on the contents, for example). If this is the chosen option, however, one of the most important home insurance tips is to be certain that rebuilding and contents replacement costs do not exceed the insured limits;
  • What’s covered? – if one of the more important home insurance tips is about value for money, then the question of good value is about the extent of cover offered. With respect to buildings insurance, for example, there are likely to be variations between policies in the range of risks – and potential catastrophes – covered. If the very worst does happen and the building becomes uninhabitable, it is worth checking how much compensation (if any) is available for renting alternative accommodation until your home has been properly reinstated or rebuilt.

The extent of cover is perhaps even more variable when it comes to contents cover. Is it an “all risks” policy, for example, that maintains cover even when your possessions or personal effects are out of the house itself whilst you are on your travels? Does the policy include cover for any sheds in your garden and the tools and equipment they might contain? Some policies even extend cover the garden plants themselves;

  • Students– it’s good to know that insurers have spared a thought or two for the particular needs and circumstances of students. With a computer and other electrical gadgets, or maybe an expensive musical instrument in their care, it is not so difficult to see how home insurance tips apply to students, too. The particular circumstances of student accommodation – very often in a house shared with others – however, mean that it is almost impossible to exercise very much control over just who might have access to the shared areas of accommodation. Contents insurance plans for students’ possessions and effects, therefore, is sometimes restricted to those kept in their own, lockable, bedroom or self-contained apartment.

Buying Life Insurance Guide

life-insuranceSecret #1: Don’t spend too much time on a life insurance quote.

Do not be fooled by the low price quotes you get online – they don’t apply to you unless you are extremely healthy. Statistically only 10% of people who apply actually get the lowest priced policy. The premium you end up paying has nothing to do with the initial quote you get online or from an agent. It is amazing to me how often I see people getting duped by an agent who quotes company X at a lower price than another agent.

Life insurance policies are the same price no matter who you buy from! One agent or website quoting a lower premium means nothing. Prices for any given policy is based on your age and health. There are a few exceptions to this but that is beyond the breadth of this article.

Most life insurance companies have 10-20 different health/price ratings and no agent or website can assure you the quote they give you is accurate. You have to apply, do a health check, and then go through underwriting (meaning you complete a mini-exam with a nurse in your home and then the company checks you doctor records and reviews and ‘rates’ your health) to get the real price of the policy. Remember that a health rating also factors in your family history, driving record, and the type of occupation you have. Only use quotes to help narrow down your choices to the top companies. You may want to consider a no load or low policy. The more that you save on commissions the more money builds up in your policy. You can even buy term insurance no load, and save a lot on premiums. You will not get the help of an agent, which may be worth something if they are very good.

The most important factor determining price is matching your particular health history with the company best suited for that niche. For instance company X might be best for smokers, company Y for cancer survivors, Company Z for people with high blood pressure, etc.

Secret #2: Ignore the hype on term versus cash value permanent insurance.

You can go crazy reading what everyone has to say on buying term insurance versus a whole or universal life policy. Big name websites give advice that I think borders on fraudulent. Simply put there is NO simple answer on whether you should buy permanent cash value policies or term insurance.

But I do think there is a simple rule of thumb – buy term for your temporary insurance needs and cash value insurance for your permanent needs. I have read in various journals and run mathematical equations myself which basically show that if you have a need for insurance beyond 20 years that you should consider some amount of permanent insurance. This is due to the tax advantage of the growth of the cash value within in a permanent policy. I am divorced and have taken care of my children should I die. I probably no longer need as much insurance as I now have. I have earned a great return on my policies and have paid no taxes. I no longer pay the premiums, because there is so much cash in the policies. I let the policies pay themselves. I would not call most life insurance a good investment. Because I bought my policies correctly, and paid almost no sales commissions my policies are probably my best investments. I no longer own them, so when I die my beneficiaries will get the money both tax free, and estate tax free.

Since most people have short term needs like a mortgage or kids at home they should get some term. Additionally most people want some life insurance in place for their whole life to pay for burial, help with unpaid medical bills and estate taxes and so a permanent policy should be purchased along with the term policy.

Secret #3: Consider applying with two companies at once.

Life insurance companies really don’t like this “trick” because it gives them competition and increases their underwriting costs.

Secret #4: Avoid captive life insurance agents.

Look for a life insurance agent who represents at least fifty life insurance companies and ask them for a multi company quote showing the best prices side by side. Some people try to cut the agent out and just apply online. Just remember that you don’t save any money that way because the commissions normally earned by the agent are just kept by the insurance company or the website insurance company without having your premium lowered.

Plus a good agent can help you maneuver through some of the complexities of filling out the application, setting up your beneficiaries, avoiding mistakes on selecting who should be the owner, the best way to pay your premium, and also will be there to deliver the check and assist your loved ones if the life insurance is ever used.

Secret #5: Consider refinancing old life policies.

Most companies won’t tell you but the price you pay on your old policies has probably come down dramatically if you are in good health. In the last few years life insurance companies have updated their predictions on how long people will live. Since we are living longer they are reducing their rates rather dramatically. Beware the agent may be doing this to obtain a new commission, so make sure it really makes sense.

I really am amazed at how often we find that our client’s old policies are twice as expensive as a new one. If you need new life insurance consider “refinancing” your old policies and using the savings on the old policies to pay for the new policy – that way there is no extra out-of-pocket costs. We like to think of this process as “refinancing your life insurance” – just like you refinance your mortgage.

Secret #6: Realize life insurance companies have target niches that constantly change.

One day company ‘X’ is giving good rates to people who are a little overweight and the next month they are super strict. Company ‘Y’ might be lenient on people with diabetes because they don’t have many diabetics on the books – meaning they will give good rates to diabetics. At the same time company ‘W’ might be very strict on diabetics because they are insuring lots of diabetics and are afraid they have too big of a risk in that area – meaning they will give a bad rate to new diabetics who apply.

Unfortunately when you are applying a life insurance company will not tell you, “Hey, we just raised our rates in diabetics.” They will just happily take your money if you were not smart enough to shop around. This is the number one area a smart agent can come in handy. Since a good multi-company agent is constantly applying with multiple companies he or she will have a good handle on who is currently the most lenient on underwriting for you particular situation. The problem is that this is hard work and many agents are either too busy or not set up to efficiently shop around directly to different underwriters and see who would make you the best offer. This is a lot harder than just running you a quote online.

Secret #7: Don’t forget customer service.

Most people shopping for insurance focus on companies with the lowest price and the best financial rating. Unfortunately I know of some A+ rated companies with low rates who I would not touch with a ten foot pole simply because it’s easier to give birth to a porcupine backwards then it is to get customer service from them.

Before I understood this I used a life insurance company that gave a client a great rate but 2 years later the client called me and said, “I have mailed in all my payments on time but just got a notice saying my policy lapsed.” It turned out the company had been making lots of back office mistakes and had lost the premium payment!

We were able to fix it because we caught the problem so early. But if the client happened to have died during the short period the policy had lapsed, his family might have had a hard time proving that the premium had been paid on time and they might not have received the life insurance money – a loss of hundreds of thousands of dollars in that case.

Secret #8: Apply 3-6 months ahead of the time you need the insurance if possible.

Don’t be in a hurry to get a policy if you already have some coverage in force. But go ahead and apply right away knowing that you might need months to shop around if the first company does not give you a good rate. Even though the life insurance industry is getting more automated your application will still often be held up for weeks or months while the insurance company waits on your doctor’s office to mail them a copy of you medical records.

If you are in a hurry and buy a quickie ‘no-underwriting’ policy without going through the full health checks and underwriting that a mainstream life insurance company requires, you will end up paying 20%-50% more because the insurance company will automatically charge you higher rates because they don’t know whether you are healthy or about to die the next day.

Secret #9: Avoid buying extra life insurance through work if you are healthy.

I am sure there are exceptions to this “trick” but I have rarely found one. By all means keep the free life insurance your employer provides. But if you are healthy and you are paying for supplemental life insurance through payroll deduction you are almost certainly paying too much. What is happening is that your ‘overpayments’ ends up subsidizing the unhealthy people in your company who are buying life insurance through payroll deduction.

Usually the life insurance company has cut a deal with your employer and will waive the required health exam for all employees – instead they just average the price for all the employees and offer one or two rates for males or females at any given age. Life insurance companies know they will pick up lots of unhealthy clients this way so they jack up the price on everyone so that the healthy people end up overpaying so that the unhealthy employees get a cheaper policy. Also, unlike the guaranteed term policies which we recommend, most life insurance you buy through work will get more expensive as you get older.

Also group life insurance is generally not portable when you retire or change jobs meaning that when you retire or change jobs you might have to apply all over again even though you will be older and probably not as healthy and risk being turned down for a policy. If the group plan does allow portability they generally limit your conversion choices and force you to go into expensive cash value plans.

I remember helping someone evaluate his supplemental life insurance. He was sure it was a better deal than any policy I could find him. Little did he know that the price of his group plan would go up every year? By the time he retired his premium would have risen to over $10,000/year. I found him a policy for around $1000/year that would never go up. Also, unlike his old group life policy, he could take the individual policy with him when he changed jobs or retired.

Secret #10: Do a trial application on a COD payment basis.

Only send money with the application if you need the life insurance coverage right away. Sending a check with the application is a traditional practice agents used to do – I think mostly because it got them their commissions faster. If you send money with an application you usually get temporary coverage immediately but if you already have plenty of coverage and are just trying to get better rates ask your agent to do a trial application on a COD basis so you only pay once the policy is approved. If you do not send money, and you die before paying for the policy there is no coverage.

Secret #11: Wear your shoes when the nurse measures your height.

When the insurance company sends out the nurse to do your health check try to be as tall as possible if you are overweight? In most states you are allowed to wear shoes and if you are a little overweight your taller height/weight ratio will look a little better to the underwriter who is determining your health rating and policy price. Also do your exam early in the morning with no food in you – this will make your cholesterol count and various health ratios look the best.

Secret #12: Be careful with extra perks and riders.

Most policies come with options like accidental death benefit, child riders, disability riders, return of premium etc. If you do the math on most of these “extras” they usually don’t make smart financial sense. Life insurance companies are out to make money and these riders are usually profitable because they either cover something that rarely happens or they are so stringent that the benefit never gets paid out. Keep things simple and focus mainly on getting a life policy to cover your life without many strings attached. Again a good agent can help you weigh the benefits of the extra riders. But be wary of an agent who tries to tack on every possible extra rider.