Like most people, I shopped for homeowners insurance when I purchased my house and then just let it automatically renew for the next 15 years. When I finally noticed it again, my policy had more than doubled, and it was going up about $200 every year.
That’s when I realized it was time to go shopping again. What I discovered is that the home owner’s insurance market has changed dramatically over the last two decades, and my existing policy was far from the best I could do.
Check Your Home’s Value
Even if you don’t think you want to change your insurance company, you should check your policy to make sure your home is not over insured. I did this a couple of years in a row, before I decided it was time to shop around, and was able to save around $200 each time I called my agent for a review.
A lot of insurance companies automatically increase the covered value of your home every year, and consequently your premium goes up. This practice of operating on an inflation mentality does nothing but put dollars in their pockets in a stagnant economy. In fact a lot of people’s homes have lost value over the last decade, while their insurance companies are charging more to cover them.
Internet Shopping Saves Dollars
When I originally purchased my policy, Independent Agents were the way to go. They were able to compare multiple policies across several companies, and get you the best possible deal. But with the advent of the internet, direct purchases give you the highest value for your dollar, and Independent Agents have become expensive and unnecessary middle men.
I ended up purchasing a policy from Travelers on line for $400 less than my agent quoted me for a lesser policy. Plus the agent was only willing to give me that great deal if I agreed to switch my auto insurance to him as well, and the auto policy was more expensive than my current one.
Now, I need to add a couple of disclaimers before ever body runs out to the Traveler’s web site. The policy I purchased was not the least expensive one I found while shopping, but it was the best one for my situation. I have an older roof, so I was unable to get less expensive policies from companies like Progressive. You should get quotes from several companies before making a final decision for yourself.
Also, when you shop online, you don’t get a local agent, you’ll deal with a different customer service representative every time you call for help. That works fine for me, but not be comfortable for some buyers.
Revisit Your Deductible
Every insurance agent I spoke to when I was getting quotes was shocked to learn that I had never had a single claim in the 15 years I had owned my home. I was told that most people have a claim every 2 to 3 years. This meant I was eligible for some of their best rates, but it also meant that I could save more by taking a minute to examine my own behavior.
I realized that if something minor happened in the house, I would never consider making a claim. In my mind insurance is for disasters. As a result, it made sense for me to have a higher deductible, and use the money I saved on premiums to make necessary repairs.
In the end I reduced my $2,000 per year premium to around $1,200 and I used the $800 I saved to have some work done on my roof – which, of course, protects my home from damage.
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