What to look at when Reviewing your Homeowners Policy

When you get your mortgage, most companies will require you to take out homeowner’s insurance on the home. For many people, this means that a significant portion of your total monthly housing payments will go towards homeowner’s insurance. In some areas of the country, this coverage will cost more than the taxes on the home. Even after a mortgage is paid off, a homeowner will probably opt for some sort of protection on what is most likely their greatest asset. Fortunately, there are ways to get a good policy without spending a lot of money.

Shop around for insurance every year. Insurance rates can change frequently, so it makes sense to compare rates and policy terms at least once a year. Look for a policy with lower premiums and deductibles. Of course, be careful that the company you choose is highly rated and has great customer service.

Pay attention to your deductible. Many people simply look for a policy with a low premium, but the deductible is very important. Unlike policies from years ago, homeowner’s policies today often have different deductibles for different disasters. For example, many policies have higher deductibles for hurricanes than they do for fires. Read your policy carefully and be prepared for the highest deductible your policy could charge you.

Have your home inspected. Premiums are based on the amount of risk that a particular home presents to an insurance company. Usually, the age of the home indicates what type of building code the structure can meet. If your home exceeds these standards, or if you have improved your structure since the home was built, you might qualify for a discount on your premiums. At the very least, your insurance company should know that the house is built to higher standards so that this construction can be replaced in the event of a disaster. Ask your insurance company who they use as an approved inspector before hiring someone.

Keep up with repairs. If you let your house fall into disrepair, you might void out certain coverages in your policy. For example, many policies require a homeowner to have their roof replaced every twenty or thirty years. If a homeowner fails to replace the roof on time, he or she might no longer be covered for damage to his or her roof. It’s also important to replace or repair any part of the structure that becomes damaged, even if you choose not to make a claim on the item. For example, a previously broken window might negate a claim for water damage if storm water seeps in through the window during a storm. Finally, keeping up with small repair jobs will help you prevent a large repair job in the future. This might also help you to get a discount on your premiums.

Pay attention to insurance company ratings. Insurance companies rate themselves, but the ranking can give you a lot of valuable information about how financially stable different companies are. If your company doesn’t have enough cash on hand to cover a major disaster, then you might want to look for a new insurance company.