As the new year is underway, now is a good time to review your home insurance and safety plans for the year. The past few years we have seen a proliferation of weather-related catastrophes.
Make sure in 2024 that you make your home safety a priority and that you get the most value from your insurance coverages.
Here are eight ways that you can reduce your risk as well as your insurance premium:
1. Obtain a Home Security System.
If you don’t have a home security system, you should seriously consider obtaining one to protect your investment.
The good news is that if you purchase one that is monitored by a central station or that is tied directly to a local police station, you don’t only protect your home, you may also receive a discount on your homeowner’s insurance premium.
2. Install Additional Smoke and Carbon Dioxide Detectors.
In addition to a home security system, you can also reduce your insurance premium by installing smoke alarms, not to mention potentially saving your life in case of a fire. Installing them in older homes can shave 10% or more from your homeowners’ premium. Many insurance companies will also give further discounts if you install additional carbon dioxide detectors.
3. Raise Your Homeowners Insurance Deductible.
You can reduce your insurance premium by raising your deductible if you are confident you can absorb the cost of paying that out-of-pocket expense if you incur a claim. Many homeowners’ policies currently have a $250 or $500 deductible. It is rare to submit a small claim for under $1,000 because insureds know it will raise your rates the following year. We suggest a $1000 deductible, which will reduce your premiums and keep more money in your pocket instead of the insurance company’s coffers. A good way to determine if you should do this is to think back to how many claims you have submitted over the last 10-20 years. If the answer is zero, raise your deductible!
4. Multiple-Policy Discounts.
Many insurance companies will extend a discount of 10% or more to policyholders that have multiple policies with the insurer (such as auto and homeowners) known as “Bundling.”
5. Plan Wisely for Expansion.
If you plan to construct an addition to the home or build a structure adjacent to it, such as a gazebo or shed, know that you will pay more for your insurance, depending on how it is built. Wood-framed structures cost more to insure because they are flammable. If you go with cement or steel-framing, you will pay less since they are less susceptible to damage from fire and inclement weather.
6. Costly Fun.
Swimming pools and trampolines can have a significant impact on your insurance costs and add 10% or more to your premium. The pool may also eliminate many potential home buyers should you decide to sell your home.
7. Consider Coverage Options.
If you purchase “guaranteed replacement value” homeowner’s insurance, your policy will cover the entire cost of rebuilding your home after a covered calamity. If you don’t have a “guaranteed replacement cost,” in the event of a claim, you will only receive the depreciated “actual cash” value of what was lost and will be short thousands of dollars when replacing and/or rebuilding after a loss.
8. Make or Update a Home Inventory.
A comprehensive home inventory catalog allows your home and belongings to be recovered, rebuilt, and replaced after a loss. While this won’t help you save on your premiums, it will empower you in case you should have to file a claim.
With a detailed home inventory, you will know exactly what you have lost in a fire or flood, for example. Having learned this the hard way during Superstorm Sandy, we recommend taking a video of every room in your house. The video will be a valuable tool when making a detailed list of exactly what was in every room in the event of a partial or total loss.
My family lost our Belle Harbor beach house in Super Storm Sandy and we learned this the hard way.
Feel free to reach out and ask us for a review and competitive quote on your homeowners’ policy!