How to Lower Your Home Insurance
Costs
by Brandon Cornett
When you buy a home, your mortgage
lender will require a homeowners
insurance policy in order to protect
their interest in the home. In most
cases, the lending institution owns
most of the home during the first
years of the home, until the homeowner
gains equity. So it only makes sense
that lenders want to protect their
investment in the home.
But this policy protects your investment
in the home, as well. It gives you
peace of mind that, in the event
of a loss, you will be covered in
some form or fashion. So you should
make sure you get solid coverage
from a reputable insurance provider.
With that being said, it sure is
nice to save money wherever possible.
And this goes for insurance policies
as well. Here are some of the ways
you can lower the overall cost you
pay for a homeowners insurance policy.
Compare Insurance Companies
When you compare one provider to
another, you are doing two important
things at once. First, and most obvious,
you are finding out who offers the
lowest rates for a comparable level
of coverage. Secondly, you are learning
about the different types of coverage
these companies provide, including
the many components that make up
a policy, the terminology associated
with it, etc. Both of these items
are important when trying to lower
the cost you pay out of pocket.
Save Time by Using the Internet
The good news is that you can conduct
much of the above-mentioned research
fairly easily, just by using the
Internet. In the past, you had to
make a lot of phone calls (or even
office visits) to compare insurance
companies and policies. There are
many big insurance websites that
allow you to do this. But as always,
watch out for scam websites that
ask for too much personal information
up front.
Another benefit to getting a home
insurance quote online is the speed
factor. Using the Internet, you can
accomplish in a few hours what used
to take a few days or even weeks.
Improve Your Credit Score
These days, in the wake of the subprime
mortgage crisis of 2007 - 2008, it's
more important than ever to have
a good credit score. For one thing,
mortgage lenders require that borrowers
have higher scores these days to
get the best loan rates. But there's
another good reason to maintain good
credit. Many insurance companies
are beginning to use this factor
when determining the price for policies.
Raise Deductible to Lower the
Costs
The deductible is the money you
would pay toward a loss before your
insurance policy would cover the
rest. If you have coverage on your
car, you are probably familiar with
the concept of deductibles. It's
the same basic concept with a homeowner
policy.
You can lower your premium by raising
your deductible amount. Many financial
experts recommend doing this as a
way of lowering premium costs. The
logic is that you know for certain
that you'll pay the premium on your
policy, but there's only a small
statistical chance of suffering a
loss and having to file an actual
claim. So this approach seeks to
lower the amount you know you're
going to pay (the premium) by increasing
the amount you may never have to
pay (the deductible).
Purchasing insurance for your home
can be a balance between cost and
coverage. You want to control the
former without sacrificing the latter.
I hope this article has given you
the knowledge and confidence you
need to accomplish these goals.
About the Author: Brandon
Cornett is the publisher of Homeowners
Insurance World (a new service
of the Home Buying Institute). To
learn more about this important topic,
or to get online quotes, visit the
author's website at http://www.homebuyinginstitute.com/insurance