How To Lose Debt

As with other forms of insurance, homeowner’s or renter’s insurance is a ripe area to reduce expenses. These types of hazard insurance policies are based on where you live. You see, you cannot up and move your house or apartment to another area or town. Your premium is based on the number of claims that are processed in your area/town, and therefore, if you live in a high-crime area, for example, your rates will be higher.

However, there are things you can do to reduce these premiums. The first is similar to the other insurances: shop around. There are 1,170,000 web pages that contain the text “Cheap Homeowners Insurance!” Many have online calculators that provide you with an estimated premium amount. Use them, do the math, and remember all of the other caveats like the claim-paying ability of the insurance company!

Besides shopping around for the best quote, there are other ways to reduce the premium rate. For example, if you own your home, you should not have to insure the land that it sits on. If your home happened to burn to the ground, it could be rebuilt. The land value stays the same. So be sure you are not insuring the amount of money you paid for the house, because that purchase price included the land.

Also, many insurance companies have automatic increases in the amount they will pay in a catastrophe each year to keep pace with inflation. You need to review this maximum payout on a periodic basis because if house or land values go down or do not rise in value as quickly, you could be over-insuring.

Please keep in mind that if you have a mortgage, you will be required to ensure it for at least the amount of the mortgage, minus the land value. Remember that bank thing again? It’s in the mortgage loan paperwork you signed! Ya think?

Another premium-reduction possibility, similar to auto insurance, is to raise the deductible. For a renter, that is easy; raise it and take on a little more personal risk. If you own the home and have a mortgage, it is likely that the deductible requirements are spelled out in your mortgage loan contract. If you raised it and it spells out a certain amount in your contract with the bank, remember the bank, and then they will contact you and be upset.

You see, communication of alterations to insurance policies for a house that has a mortgage automatically takes place between the insurance company that insures the residence and the bank or mortgage company that holds the mortgage on the property.

It is in the bank or mortgage company’s best interest to be sure you are paying for coverage that will cover them in the case of a loss. You have to love this stuff!

If you don’t have a mortgage, or it’s not clearly spelled out in your mortgage loan contract (unlikely), you are free to set the total amount of the insurance policy and/or its deductible to reduce the insurance premium.

There are other ways you can reduce your homeowner insurance. One way is your claims history. If you file a claim on a weekly basis, your premiums will be higher. Just like auto insurance, you will pay more if you have to actually use the insurance that you are paying for. Isn’t that great??!!

Another way to reduce premiums is to install smoke detectors or a monitored burglar alarm system. You see, the insurance company wants you to cover their butts in the case of a loss. If home is burglarized, for example, there will potentially be less financial loss if the police arrive in 30 seconds. This is especially true if they actually catch the crook red-handed with your goods. The goods will be eventually returned to you, hopefully unscathed.

For smoke detectors, if you wake up to a fire and get out of the house, there is less risk for the insurance company to have to pay out for the loss of life.

Finally, like the other forms of insurance, if you bundle homeowners, car insurance and life insurance with one company, for example, your overall rate will be lower.