How To Save Money on Home & Contents Insurance

It doesn’t take long looking into homeowner’s insurance to find out that there is more to it than just insuring the structure in which you are living.  You also need to insure all of the things that go into your home as well.  Several considerations need to be taken into account when it comes to providing insurance for your single largest financial investment.  

One thing that everyone is interested in is being able to save money.  It is quite possible with your home and contents insurance by three primary means.  The first is to be sure and do some comparison shopping.  It is not unusual at all for a person to be able to save money (and sometimes quite a bit) on their present insurance costs.  We’ve all seen the TV commercials about saving money by comparing auto insurance rates, well, the same is true from homeowner’s insurance as well.  Be sure to get at least three quotes.

A second means of saving some money is to take on more risk for yourself.  The way to do this is to adjust your deductible.  The deductible is the amount that you must pay first before your insurance company will pay anything on a claim.  The less you have to pay for your deductible the more you have to pay in premiums.  The more risk you take on (that is the higher your deductible), the less your premiums. 

The key here is to not get yourself in a bind.  Be sure you have the amount of your deductible on hand (in savings or wherever) in case a claim must be filed and you can meet the deductible.  Otherwise, if you can’t cover your deductible, the insurance will not kick in. 

A third savings can be realized by protecting yourself against break-ins and theft.  The simple way to do that is to install a home security system.  Statistically speaking, a home is less likely to be broken into where a home security system is present.  Insurance companies recognize that and offer discounted rates on homes with such systems installed.  So, they can easily pay for themselves in a pretty short time through these savings.

The systems themselves, along with the installation, has been greatly simplified in recent years through wireless technology.  Be sure to check with your insurance provider to learn system requirements to qualify for discounted rates.

A very important decision to be made regarding insurance for home and contents has to do with the type of coverage desired.  You have the choice of either cash value coverage or replacement value coverage.  There is a difference in the expense involved in the two, cash value coverage is cheaper, but it could end up costing you in the long run.  The difference in the two has to do with the depreciation of value of your property.  Cash value coverage provides a dollar amount only for the value of the property at the time of loss.  Over time, property depreciates.  So, you would only receive money for the property’s value at the time of loss. 

Replacement value provides coverage for the cost of replacing the lost or damaged property no matter what its present depreciated value might be.  This coverage does cost more initially, but will not require additional cash outlay if you ever have to replace damaged or lost property.