The bottom line of any insurance policy is peace of mind. Whether it's time to renew a policy or buy your first homeowners, condo, or rental insurance policy, the process can be bewildering. We'll help you sort it all out and aid you in making smart choices that will impact your wallet for years to come. When faced with these decisions, many of us don't know what we should be watching for; we'll fix that. You'll know what to look for when buying or renewing the policies that protect your home, condo, apartment, and possessions. It all boils down to the following tips.
Let's start with the foundation of a policy – what is it?
Your premium is based on risks
It's your job to understand what the risks are. In a nutshell, your premium is a mitigated risk for the insurance company providing coverage. Factors are unique to you and where and how you live. They range from crime rates in your neighborhood to how you do (or don't) secure your home. Even the number and size of trees around your home, condo, or apartment are a factor. Trees are considered because of the potential damage they can cause in instances like hurricanes. These elements are analyzed to determine your unique policy's cost (assumed risk). Be sure to ask your agent questions about these factors before you make your decision and take the time to compare the policies available to you. If you thoroughly understand what is covered under your policy, you won't make assumptions and be sorry later.
Now, look for ways to have your premium work for you – here's how:
Protect your home – save money
It's simple, practical investments in home security and safety can reap financial rewards in the form of lower premiums. You may also find insurance savings based on home construction materials and its physical location. So before you commit, inventory your home, and if you have any of the features below, ask your agent if they will result in a discount on your insurance:
- Masonry Frame vs. wood (built with cement block walls)
- Newer Roof (less than 15 years old)
- Hip Roof (sloped on all sides)
- Roofing material (asphalt shingle or metal)
- Newer Home (built in 2002 or newer)
- Installed central fire alarm and burglar system
- Up-to-date wiring and electrical
- Complete Fire Sprinkler System
- Secured Community (protected by 24-hour security patrol, 24-hour manned gates and/or passkey gate protection)
- Farther Inland (away from the beach)
- Within 1,000 feet of a fire hydrant and 5 miles of your fire station
- Wooded Area
Download this useful handout for a list of home features that could lower home insurance cost.
These features all tie back to risk mitigation. If you take measures to make your home safer – from burglary, fire, or weather, you might save money.
Inventory your stuff using your phone or camera
Know what you have and if it's covered by your policy.
This is so basic but often overlooked – know your policy before you sign to ensure the things you consider valuable are covered if something happens. A great idea is to be prepared with a digital inventory of your possessions. Group them in categories and walk the agent through them to make sure they're covered before you commit to a contract. Contracts are written to legally protect you and the insurance company. That means they're written in "legalese" but does not mean they're indecipherable. Simply ask questions until you understand what is and is not covered, and make sure the policy meets your needs. If you don't know if your engagement ring or grandmother's silver is covered for full replacement value – ask!
Those are the top tips to consider when making your decision. But, most importantly, remember to take your time and ask questions.