10 Ways You Can Save $
on Your Homeowners Insurance—And Provide Better Protection for Yourself and the
People You Love!
By Andrew Rumbold
R.A. Fraser Agency
Your home is probably your most valuable asset. It
is also a huge risk for you financially. What
if something happens to it? A fire? A flood? Vandalism?
What if someone visiting you slips, falls and suffers
a serious injury? And sues you? An accident like that
could put a dent -- or worse -- in your financial security.
For most people, insurance is a mystery.
They know they need to have insurance for their homes (mortgage
lenders require it), but they don’t understand the coverage
provided by the policy. And they don’t know which insurance
companies offer the best -- the best! -- prices. Because
they don’t understand the product, many people think
insurance is a rip-off, and it is -- if you pay too
much or buy coverage you don’t need.
All homeowners insurance is not created equal. In fact,
almost none of it is. There are thousands of different
products out there, from hundreds of insurance companies. How
do you find the insurance and the insurance company that
are best for you? You read this special report and tap into
my vast knowledge of the products and the companies that
offer them.
I am an insurance “insider.” A licensed member
of the “club.” I’ve sold the product. I
know what kind of insurance fits your needs. And I know what
insurance companies sell this kind of insurance at the best
-- lowest! -- price. Because I’ve specialized
in the insurance needs of homeowners and their families,
I have decided to dedicate myself to solving for you some
of the mysteries of homeowners insurance.
Replacement Cost or Actual Cash Value
Your homeowners policy does not provide coverage for all
potential catastrophes that could damage or destroy your
home. Earthquake and flood are two “perils” for
which there is no coverage. (You can get coverage
for earthquake and flood damage in a separate policy or as
an endorsement to your homeowners coverage.) Also,
there is no coverage for damage caused by water that seeps
into your home from the ground. You do have coverage for
losses related to fire, smoke, lightning, windstorms, hail,
explosions, vandalism and theft.
There are different ways to insure
your home, both the structure and your personal property.
Let’s take the structure
first. There are two types of coverage: replacement
cost and actual cash value. Replacement cost is
better for you, the homeowner. Under replacement cost coverage,
the insurance will cover the cost of replacing the part of
the structure that is damaged, up to a maximum dollar amount.
Under actual cash value, the insurance will cover the cost
of replacing the damaged structure minus an allowance for
depreciation. If you have an older home, that allowance could
be quite significant. Unless your policy specifically
says it provides replacement cost coverage, the coverage
is for actual cash value.
So how much insurance should you have? Basically, unless
you want to pay some of the costs yourself, you
should insure your home for what it would cost to rebuild
it if your residence were destroyed. How do
you find this out? Your insurance agent can have an answer
for you in no time. If you don’t have an insurance
agent -- and you should -- you can contact your local builders
association. In the home construction world, building costs
are calculated on a square foot basis. As such, to determine
the cost to rebuild your home, take the square footage of
your house and multiply by the average per square foot building
rate in your area.
Your possessions are also insured on a replacement cost
or actual cash value basis. Again, unless specified otherwise,
the coverage in your policy is actual cash value. Homeowners
policies also have limits on coverage for such items as jewelry,
fine art and computer equipment. Read your policy
and see what these limits are. For example, the standard
policy will provide a maximum of $1,000 coverage for your
jewelry if it is lost or stolen. If you have lots of jewelry,
fine art or computer equipment, you should consider purchasing
a special personal property endorsement or “floater” that
provides the coverage you need.
Speaking of need, you need to take written and visual
(still pictures or video) inventories of everything you
own in your home and in other buildings on the property. Include
all furniture (indoor and outdoor), appliances, stereos,
computers and other electronic equipment, hobby materials
and recreational equipment, china, silverware, kitchen
equipment, linens, jewelry and clothing. For the major
items (computers, televisions, stereo systems, etc.), write
down the serial number, make or model number, purchase
price, present value and date of purchase of each item.
If you have the receipts for the items, attach them to
the inventory. Make at least two copies of the
inventory and store one of those copies offsite -- a safe
deposit box is a good place. Store the pictures or video
of the inventory offsite as well.
10 Ways to Save $
Now that you know the basics of a homeowners insurance policy,
here are 10 ways you can pay less. In many cases, you can
get the same level of coverage for fewer dollars.
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One Insurer, Multiple Policies --
Do you have an automobile insurance policy? If so, is
it with the same insurance company that provides your
homeowners insurance? If the answer’s no, you’re
paying too much -- for both policies. Almost
every insurance company that sells homeowners insurance
wants its policyholders to also buy auto insurance from
that company. These insurers offer so-called multi-policy
discounts. Usually, these discounts are at
least 10% -- and some insurers apply the
discounts to both the auto and the homeowners/renters policy.
-
Raise Your Deductible -- The deductible
is the amount you pay before insurance kicks in if you
have a claim. For example, if you have a $250 deductible
and you file a claim for $1,000 in damage to your home,
you pay the first $250 and your insurer pays the balance,
$750. The higher the deductible you choose, the more you
pay. Also, though, the higher deductible, the less you
have to pay for your policy. Depending on the insurance
company, you can save between 12% and 37% if you have a
deductible of $500 to $5,000.
-
New Is Better --
Insurers really like newer homes. That’s because it’s
less likely something will go wrong with the electrical,
heating and plumbing systems. In addition, the structure
itself is in better shape. Insurers offer discounts of as much
as 8% to 15% if your residence is new.
-
Location, Location, Location --
Where do you live and what is your home made of? If you’re
in the Eastern United States, it’s better from an
insurance perspective to have a brick or masonry residence
because such a structure has a greater resistance to wind
damage. By contrast, frame homes are better in the earthquake-prone
West. The right structure in the right region
can save you 5% to 15%. Further, if your
home is near a fire station, you will pay less for homeowners
insurance. If you live in an area that is prone to flooding,
you may be required to buy a flood insurance policy, which
costs about $400 a year. If you are not required to buy
the coverage and still live in a flood-prone area, your
homeowners policy will not provide coverage for losses
arising from flooding.
-
Insure the House, Not the Land --
Nobody is going to steal your land. Fire and high winds
won’t “destroy” it.
As such, when deciding how much homeowners coverage to
have, don’t include the value of the land, only the
value of the house and any other buildings on the property.
If you include the value of the land, you’re paying
too much.
-
Don’t Insure What You Don’t
Have --
Each year, you should review your policy to see what coverage
you have for your possessions. If you have made a major
purchase, you will want to increase your limits of coverage, but
what if you sell something or somethings? You don’t
need as much coverage. Pay particular attention
to items that are covered by endorsements or “floaters” to
your policy, items such as jewelry and computer equipment.
-
Better Safe(r) Than Sorry -- Smoke detectors,
burglar alarms and deadbolt locks are usually worth discounts
of at least 5%. You can get even bigger discounts,
15% to 20%, if you install a sophisticated sprinkler system
or an alarm system that rings at the police station or
a security company. However, not all of these
systems qualify for discounts. Before you install one,
check with your insurer to find out what type of system
qualifies for a discount and how much you would save on
your premium if you installed the system.
-
Where There’s Smoke
. . . --
There’s fire. Smoking (unattended cigarette butts,
etc.) produces more than 23,000 residential fires in this
country each year. That’s why some insurers
have discounts if all the residents in a home are nonsmokers.
-
Don’t Jump Around --
If you’ve
been with an insurer for a while and you like that insurer,
stay put. Some insurance companies automatically
have discounts for policyholders who have been with the
companies for a certain number of years. For example,
5% for at least three years, 10% for at least five years.
Is Your Coverage Adequate?
I won’t kid you. There’s more to this insurance
game than saving money. In fact, while it’s nice to
lower your insurance costs, it’s probably even more
important to make sure you, your loved ones and your assets
are covered adequately. It’s not a pleasant thought,
but insurance is about worst-case scenarios.
It’s also about peace of mind, knowing that you have
the worst-case scenarios covered.
Because I know peace of mind is so
important, I am willing -- actually, I’m excited
-- to reveal to you the secrets about insurance. Secrets that ensure you have
all the protection you need.
Why would I just give
these secrets away? Because it’s just as good
for my business as it is for you. I want
to let you in on the knowledge I have accumulated as
an insurance industry professional and insider. I want
to do this because I have found, time and time again,
that generosity and the willingness to provide really
great service come back to me. Tenfold. In fact, that’s
how I have built my business.
Three Steps to Protection
There are three basic steps you can
take to protect your and your family’s financial
well-being:
-
Have an insurance specialist conduct a risk analysis
of your home, car(s) and family. How can you
adequately address your risks with insurance if you don’t
even know what these risks are? I’ve found that
most people face more risk than they know. Because everyone
is different, it’s not like you can ask a friend
or relative to assess your insurance needs -- unless
they are insiders in this business. If you
haven’t had your risks assessed by an insurance
professional, you could be inviting financial disaster. You
need a professional, a knowledgeable insurance insider,
to put together a comprehensive insurance plan that truly
protects you. Our office will do that for FREE.
-
Use an independent agent. There are
several ways home insurance is sold in this country. Some
people buy it by calling a toll-free number and talking
to an employee of an insurance company. Others take advantage
of direct mail offers. And some buy from agents who represent
just one insurance company. A direct mail
piece is not going to be able to assess your level of
risk. Do you really want an insurance company employee
to be your agent? And what happens if the agent who represents
just one company doesn’t have the kind of insurance
coverage you need? You need someone who’s going
to work for you. And you need someone who can offer you
several options. Someone who can go to numerous insurance
companies and compare their products and prices. Someone
who, if necessary, can place parts of your insurance program
with more than one company. Do you want a good price? Do
you want options and flexibility? And do you want protection
against worst-case scenarios? There’s only one
option here: Use an independent agent.
-
Don’t trust the financial
protection of you, your family and your assets to an
insurance agent who is not a homeowners insurance specialist.
A specialist? Absolutely. Look, insurance is a huge
industry.
There’s insurance
for everything. And nobody can specialize in all of it. In
fact, a professional independent agent can specialize
in only a few niches -- and really understand them. And
I do. I’ve studied the homeowners insurance market
in our community for years.
I know:
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Which homeowners insurers have the best rates.
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Which give the most discounts.
-
And which provide the best claim service.
I will give you this information
for FREE. No charge. No obligation. I do this because I’ve built my business
on my reputation. I never hard-sell insurance. I’m
in the service business. The better service I provide, the
better it is for all of us.
My clients stay with me because of
my service – and
they refer me to their family and friends.
I believe I serve families in our community better than
anyone in this area -- in any profession. I believe this
because I spend a lot of time with my clients, determining
their needs, their level of risk, and finding the perfect
insurance program for them.
So if you want to protect yourself,
your family and your assets from a crisis or catastrophe
or just see if you can save money on your insurance, call
my office. We’ll be glad to help
.
© 2006, RA Fraser: The reader assumes all responsibilities
for his/her own actions in regards to any items discussed
in this report. Adherence to all applicable laws and
regulations, federal, state and local, governing the use
of any product or service described in this report in the
US or any other jurisdiction is the sole responsibility of
the reader. The publisher and author assume no responsibility
or liability whatsoever on the behalf of the reader of these
materials. The reader is encouraged to consult directly with
his/her insurance professional.
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