A little work upfront may pay off with less expensive premium
By Courtney Ronan
If you're a first-time homebuyer overwhelmed at the prospect of closing costs, inspection and appraisal fees, "earnest money" and -- oh, yes -- mortgage payments -- undoubtedly you're a bit queasy about your homeowners' insurance, as well. It's the icing on an already very expensive cake.
Rumor has it that you, the newly cash-poor homeowner, have the power to receive discounts on your insurance policy if you take any one of a long list of measures to improve the relative safety of your home.
At this point, you're probably willing to stand on your head if that's what it takes to lower your monthly expenditures. None of these measures are that drastic. And sure, they're going to cost you some money up front.
But they're a wise investment in your safety; they'll save you money in the long run; and they'll even boost the resale value of your home come the day when you decide to sell.
The insurance companies' rationale is simple: The more safety measures you have in place throughout your home, the less likely they're going to have to come to your aid following a fire, flood, theft or other major disaster.
The following list outlines some of the protections you'd be wise to investigate and install prior to taking out your homeowners' insurance policy - or soon after you begin coverage.
There's no blanket guarantee, of course; some insurance companies offer discounts for these protections, and some don't. So it's clearly in your best interests to shop around and find out who will make you the best offer for your efforts.
Security system (offers an average of between 5 percent and 15 percent discount off your insurance policy, depending upon the provider)
Carbon monoxide detectors
Handrails installed alongside stairs
Fire escapes (if present) that are easily accessible
Wiring system which is both up-to-date and adequate for multiple appliances, which prevents overloading of sockets (a fire hazard)
Well-grounded outside antenna(e)
Backyard pool (if present) surrounded by fence with a securely locked and bolted gate
Heating system which is both updated and regularly inspected by a professional
Sidewalks outside the house are maintained and contain no large cracks, chips or holes
Flammable substances kept outside, preferably, at relatively cool temperatures to avoid overheating and risk of fire.
In many cases, new homeowners either have the above safety features, or they've performed various updates to their homes, and they fail to report them to the insurance company.
As a result, they end up paying more than they would had they spoken up. Before you meet with an insurance agent, make a list of all of your home's features, be they mere updates or safety features such as those listed above. List anything and everything you can think of; you have nothing to lose but money.
Some insurance carriers offer a discount to homeowners of properties built within the last decade. And if your home sits nearby a fire department or even a fire hydrant, you may apply for an additional discount; ask if the insurance provider offers such a benefit. You may also wish to investigate the option of combining your homeowners' insurance and automobile insurance under one policy, which typically results in a lower payment for you.
Another money-saving measure factor you may consider is raising your deductible, which can lower your premium significantly. Before you sign enthusiastically on the dotted line, however, make sure that in the event you need to use your insurance policy that your budget will accommodate a higher deductible.
In today's competitive market, it's particularly important to shop around, because it's quite possible you'll receive widely disparate quotes on policies that offer essentially the same coverage. This climate is to your advantage, however. If you don't like the quote you receive, you'll find plenty of other providers who will offer you a potentially better quote. But before you make judgments, be sure that the coverage you're being offered is comparable to other, more expensive policies.
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