06 Jul Four Ways to Save on Homeowners Insurance
Know the difference between replacement cost and actual cash value
Homeowners insurance comes with options, and the best way to find the right plan for you is to understand your options. Replacement cost and actual cash value are important both when shopping for a new or existing policy. Replacement cost will insure you for the cost that it would take to replace your home and all of the other personal property in it. The other option is Actual Cash Value. This considers the actual value of your home and does not take into consideration zoning permits or removal of damaged property. Actual Cash Value is more commonly used by investors than homeowners.
Improve your home
Changes and improvements can lead to lower premiums. If you reside in an older home there might be some risks, such as electrical failures or pipes breaking. Taking the time to improve these features of your home will cost some money up front, but can lower insurance premiums and save you money in the long run.
Agree to a Higher Deductible
This can reduce your annual premium by a significant amount, saving you money. The downside is that if there is a casualty, you will be responsible for it until it reaches the higher deductible limit. You should be able to handle the additional amount before agreeing upon a higher deductible. Given that your premium typically goes up when you make a claim, a silver lining of the higher deductible is that you will file fewer claims
Consider an Umbrella Policy
This can cost you money upfront again, but in the unfortunate event that you need to use your homeowner’s insurance for a large claim, an umbrella policy can be a major benefit. An umbrella liability policy covers a much higher limit and goes above and beyond claims directly relating to your home and auto. The main purpose of your umbrella policy is to protect your assets from an unforeseen event, such as a tragic accident in which you are held responsible for damages or bodily injuries. If another party files a lawsuit against you, your umbrella coverage will pay for the damages you’re legally responsible for up to the policy limit.
For any questions or concerns about your policy options, contact your local AWS Insurance Agent.