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When my homeowners insurance policy arrived in the mail last month, I did something I normally don't do. Instead of throwing it in the filing cabinet with all the rest of our important household documents, I took the time to read the policy.
When was the last time you reviewed your policy? If it's been a few years, then you might be paying for more insurance than you actually need. Here's some of the changes I made to my insurance policy which dropped my rates by $350 a year.
Adjusted the value of the home.
The last time I updated my policy was at the peak of the housing boom in early 2006 when my home was worth about $480K. Since then, my home has dropped nearly 35% in value. My agent reduced the replacement value on our home to its current value which lowered our premium by a few hundred dollars.
Increased the deductible.
Another change I made to our homeowners policy was increasing the deductible from $500 to $1,000. This also dropped our premium costs.
Updated the floaters.
Most insurance policies provide basic coverage for the contents of your home. To add extra coverage for art work, high end computers, and other items not normally covered, your agent may suggest a floater, a special kind of insurance for the specific item that you want to insure. After reviewing my policy, I discovered that we still had insurance floaters on two of our old computers and some photography equipment which were no longer worth their original value. These floaters were cancelled for additional savings.
Reviewed home improvements.
In a historical house like ours, old wiring, old plumbing, crumbling chimneys, and old furnace systems often means higher insurance premiums. After finishing the last of the structural upgrades this year, I let my agent know that the house was finally up to code which dropped the rates on our policy even more.
These are just four of the ways in which I lowered our yearly homeowners insurance premium merely by calling up my agent and asking about ways to lower the cost. When a family is on a tight budget like ours, it really doesn't make sense to pay more for insurance than we really need.
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