What is Home Insurance?
Home insurance is a type of property insurance and is also known as homeowner’s insurance. It usually covers a private residence. Such insurance covers various losses occurring to one’s home, personal possessions, and other contents.
In addition to this, home insurance also provides financial protection against disasters.
Do you know that insurance also differs from the type of home you live in? Whether you live in a family home or a mobile home, it’s important to help protect your home with mobile home insurance. Insurance coverage for mobile and manufactured homes is usually quite similar to a standard homeowner’s policy. It offers coverage for the home, your personal property and liability claims.
What does homeowner’s insurance not cover?
Insurance is meant to cover the things you can’t plan for like natural calamities. You also need to plan for the things the homeowner’s insurance doesn’t cover. It is very commonly seen that people file home insurance claims just to find out too late that they’re liable for the high cost of damages themselves.
It covers damage but many of us assume that it covers large break-downs such as furnaces or water heaters. But the reality is, it does not cover such damages. It also does not cover mechanical breakdowns. Such breakdowns fall under the umbrella of general maintenance.
Why go for home insurance?
If you’re an owner of a home, you’ll need homeowners’ insurance for sure as it’s going to protect your investment and finally is going to ensure that your finances are safe, in case something happens to your property.
Now the question arises that how to find the best home insurance provider along with the best coverage options and that too at the best price?
No doubt, pricing is an important factor to consider but it’s about protecting the property we are living in and that’s what matters a lot.
There are a number of insurance companies and each one of them is different. It is to be noted that home insurance costs seem to rise every year as housing prices come down. But this doesn’t mean that one should not go for it. Moreover, it takes a lot of studies to understand the difference between policies. Also, it’s easier to stay with the policy that has the appropriate coverage than the other which doesn’t have it. And longer-term policyholders can earn discounts for longevity.
There is nothing like cheapest home insurance but you can control the cost and hence manage your home insurance.
Here are the 5 ways that will help you manage your home insurance:
- Increase deductibles: The level of deductible you choose has a very important role to play in the price of your coverage Always remember that if you choose a high deductible, you have to pay more if an incident does occur. Also, insurance isn’t meant to cover the small stuff. Set deductibles as high as you can afford.
- Don’t make small claims: Make sure that you don’t make small claims. It is to remember that frequent claims can drive up rates.
- Protection from fire: This is one of another major factor which should be considered if you are thinking of managing your home insurance. If a fire were to break out in your home, a poor fire protection rating increases the chances of total property loss, which in turn increases your insurance premiums. Fire protection systems wouldn’t be sufficient to decrease your premiums in that case, but installing a sprinkler system could. It’s a costly solution, but one that could pay off in the long run.
- Combining insurer and policies: Many insurance companies give discounts for different policy households including home and auto insurance. Then go for the liability policy over both to optimize cost. In this way, you can manage smartly.
- Talk to your agent about other discounts: Sometimes agents offer a discount for good drivers, or retirees, or people with good credit ratings. Always ask your agent about the discounts and offers he is having for you.
- Reinforce your home and roof by installing storm shutters,re-constructing older homes to make it prepare for earthquakes, modernize heating, plumbing, electrical to reduce fire and water damage risks.
- Install a backup generator and smoke/CO2 detectors.
- Stay away from flood-prone areas. Look for the houses made up of stone or bricks in high wind and earthquake-prone areas. Locate in communities with professional fire departments.
- Consider purchasing security alarms. You can improve home security by adding smoke detectors, burglar alarms, and deadbolts easily accessible fire extinguishers are another good addition and hence will reduce the risk of severe flame and smoke damage.
- It is also an interesting point to be noted that insurance companies love mature homeowners, which means if you are financially more stable. If your age is 45 or older than that, you will likely be given an advantage of a reduction in your home insurance premium.
- If everything else fails and you’re still looking for ways to save, it’s time to look at your credit rating. Try to build a strong credit score. Most insurance companies use your credit score. They consider this factor in determining your coverage terms and premiums.
The Bottom Line:
You can’t control some of these factors. But you can surely minimize the risks that are within your power to control. In this way, you can help keep your home insurance premiums down which is not less than having the cheapest home insurance.
Before finalizing, always be sure to read the insurance policy and ask your agent a lot of questions so you understand what and how your insurance is going to cover. Also, compare several companies in terms of their pricing, ratings and homeowner’s insurance offerings before moving forward with a particular policy. You can also take help of advanced research. It will help you get a high-quality homeowner’s insurance policy that fits your budget and needs. So, don’t rush and think properly before investing in one.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.