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Switching Homeowner’s Insurance Can End Up Costing You Big

Posted in Home Insurance , Save on Home Insurance

August 17th, 2010
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There is no shortage of home insurance commercials on television screaming the virtues of switching insurance policies to a new company for large savings on your insurance premiums. However, it may not be as easy as the commercial spokesman makes it out to be. There are a few hidden pitfalls that you need to be careful to avoid in order to make switching beneficial to you and your wallet.

The following are three ways switching homeowner’s insurance can end up costing you more than you save:

Missing The Fine Print

If you change homeowner’s insurance, be sure to read the fine print of your new policy. Does it require you to get a home inspection and new improvements made before your policy takes effect?

One North Carolina woman recently switched her homeowner’s policy to a new insurance carrier only to find out that she needed to make over $4,000 worth of repairs to her aging home to begin her new coverage. It would not have been a major issue except for the fact that she had already canceled her original homeowner’s insurance before finding out about the expensive upgrades she had to make to her home.

The upgrades now have all but negated the cost savings she would have enjoyed by switching insurance companies for years to come. You should never cancel your current insurance policy before you have the new one in place which includes any required home inspections the new insurer requires.

Losing Discounts By Jumping Around

One of the biggest discounts that policy holders enjoy is a discount for having multiple policies with the same insurance company. If you begin to chase better insurance rates around the internet and through other companies that have strong advertising campaigns, you could possibly run the risk of missing out on discounts that you used to enjoy from your previous insurance company.

It can really exacerbate the situation if you are moving automotive and homeowners to another insurer. You receive sizable discounts on your insurance policy for having them all in one place.

Different Requirements Between Insurers

Does your current insurer require you to have a permanent fence surrounding your swimming pool? Did your pit bull mix pass the dangerous dog screening from your previous insurance company?

The same might not be true of your new homeowner’s insurance company. You may find yourself on the wrong end of a cancellation letter in a few months if your insurer decides to audit your account and finds you outside of their guidelines.

You can never be too careful when you decide to switch insurance companies. The lure of a cheaper premium may not be as wonderful as you initially thought. Many insurance companies may not even want you back as a customer if you decide to abandon them in search of a cheaper deal elsewhere.

You have to double check the fine print and have your ducks in a row before you cancel your current policy. With a little prior planning and some research, you should be able to steer yourself away from a cheaper insurance policy that will cost you dearly in the end.

Hank Coleman is a personal finance writer and all around money and investing junkie who is currently studying for his CFP credentials. He received his B.S in Business Administration from the Presbyterian College in South Carolina in 2002 and went on to receive an M.S. in Transportation and Logistics from the North Dakota State University in 2007 and an M.S. in Finance from the University of Maryland in 2008. You can read more of Hanks writings on his website HankColeman.net and can also follow him on Twitter.

How Twitter Could Increase Your Home Insurance Premium

Posted in Home Insurance , Home Insurance Claims , Save on Home Insurance

July 27th, 2010
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The president of home insurance at Confused.com, Darren Black, was recently quoted as saying, “I wouldn’t be surprised if, as social media grow[s] in popularity and more location-based applications come to fore, [home] insurance providers consider these in their pricing of an individual’s risk.” In other words, his prediction is in time, we could see home insurance coverage increase as more people take to social media sites like Twitter and Facebook.

At first glance, it seems there is no connection between home owners insurance and social media. However, from the looks of things, the two may be crossing paths through the medium of social media, which has lately been garnering as many negative effects as positive.

Burglary Rates Could Increase Due to Reckless Behavior on Twitter and Facebook

Facebook and Twitter, along with other popular social networking sites, create an environment that encourages sharing personal information. In fact, sharing is downright expected and really the point of participating in social media networks.

However, when it comes to safety, these environments aren’t the greatest. Predators can be lurking for information and waiting for the opportunity to attack.

As noted by Black, criminals are becoming increasingly sophisticated in their information gathering and can easily determine where you live by the few details you provide on your profiles, along with their savvy knowledge of Google Earth and Streetview.

It’s for this reason that it’s more important than ever to be discreet about the information you share online. Otherwise, you could put yourself at risk of burglary and increase the likelihood of a higher home insurance cost in the future.

Homeowners Insurance Companies Are Evaluating Risks of Social Media

Since home insurance companies are catching on to careless social networking behaviors, some argue you could eventually see an increased home insurance estimate as a result. Black predicted, in fact, that we may see a rise of up to 10 percent for people who use these sites as companies begin to consider social networking in their pricing for an individual’s risk.

Further, being burglarized or seeing a higher home owners insurance quote is not the only negative consequence of information sharing over social networks. If insurance companies see you as too high of a risk, they could actually reject you as a customer.

If you think insurance companies don’t look at social networking sites to gather information about current and potential customers, think again. It happens all the time and could easily happen to you as the practice becomes commonplace.

Protecting Yourself Against Burglary and Higher Insurance Rates

So what should you do to ensure you don’t run the risk of increasing your next home insurance quote? You could try to decreasing your coverage to home appliance coverage in order to pay less while remaining covered if you’re burglarized.

Of course, the idea is to not be burglarized in the first place, especially if it’s totally avoidable. So here are some tips for changing your behavior online and protecting your home and insurance rates:

• Censor what you post: Don’t post your personal information (school, work, e-mail, phone, kids’ or spouse’s names, home address) on social media sites ever.
• Don’t “friend” or “follow” people you don’t know: If you don’t know a person on a social networking site, don’t accept friend requests or follow them because it will likely open up your profile to strangers and offer information you don’t want known. Also, keep your profile private to block anyone from seeing your limited information except for your friends.
• Shut off location-based features: Any features that expose your network or location should be shut off unless they are absolutely critical.

If you’re concerned about higher rates for coverage in general, you could always shop around for online home insurance. Also, if you’re concerned that you’re making too many coverage commitments, you could look at a home insurance calculator to help you figure out how much to cover in your home.

Above all, change your habits when necessary to keep your family and home safe, and start with your social networking behavior.

The Real Way to Lower Florida Hurricane Insurance Premiums

Posted in Home Insurance , Hurricane Insurance , Save on Home Insurance

September 24th, 2009
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In the midst of our recession, Florida residents are looking for as many ways as possible to lower their hurricane insurance premiums. Unfortunately, it doesn’t look like they’re going to getthe help they hoped to receive from the state’s insurance provider.

Citizens Out

Citizens Property Insurance – the cheapest provider in the area – has been in financial trouble for some time, making it difficult to dish out the cash needed to help rebuild properties that have been destroyed by previous storms. And even thoughthe statehas received help from the government in the form of a $5 million FEMA grant to help rebuild and prepare the area for future hurricanes which can help lower premiums,not everyone is going to benefit from it.

Funds are Dry

Why, you ask? Well, for one, not everyone is going to have access to the funds – there’s simply not enough money. And two, those who do qualify have to get their hurricane straps, stronger roofs, and window protection before another hurricane hits. If they’re not able to, then the grant will not have helped them at all.

Of course, if the appropriate adjustments to property can be made in time then residents can benefit from lower hurricane insurance premiums. In the meantime, Florida has been trying to create a number of legislative efforts to help hold down policy rates. But it seems that the real way to lower northwestFlorida’s hurricane insurance premiums – for the time being, at least – is going to be the luck of not having a hurricane hit the area at all.

Reducing Property Insurance

Posted in Home Insurance , Save on Home Insurance

September 16th, 2009
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If you’ve noticed that market values have lowered in your area and are considering lowering your property insurance, you might not want to act just yet. While it’s natural to want to reduce the cost of your insurance to match your home’s newly-lowered market value, if you move forward without knowing all that your insurance truly covers,you might be digging a financial hole that’s difficult to climb out of.

One reason this is true is because it costs a great deal to rebuild a house. So if you find that you need to make major repairs to your house, the cost of tearing down and building again can cost an arm and a leg – and these costs are not reflected in the market value. In other words, as you price your property insurance, it should not just incorporate market values for your area, but also the cost to rebuild in the event that something tragic occurs.

However, before you dive in and start determining the costs, it’s good to sit down with your agent to help make these determinations. This way, you can ensure that you’re making the most cost-efficient decisions regarding the protection of your most valuable asset.

Saving on Home Insurance

If saving is a huge priority for you right now, there are some ways – other than reducing the amount of property insurance coverage you carry – that can lower costs:

• Evaluate Your Credit. It is well known that a credit score is a huge factor in insurance rates. So if you know that you’ve cleaned up your credit recently and have lowered your score, it’s a good idea to talk with your insurance company about repricing your coverage.
• Raise Your Deductible. Another idea that you might consider to lower the cost of your coverage is to choose a higher deductible. The higher your deductible, the lower your premium will be.
• Seek Discounts. Many insurance customers don’t know that if they purchase more than one type from the same company they can receive discounts on all of them. This could help to lower your property insurance premium.

It may be incredibly tempting to reduce your property insurance when you see market values lowering in the area. But if you remember that market values don’t tell the whole story, you can make a better choice insurance-wise. If you decide to go forward with reducing your coverage, make sure you have enough to at least rebuild your house in case it is destroyed.

How to Save on your Home Insurance

Posted in Home Insurance , Save on Home Insurance

August 24th, 2009
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For many homeowners, home insurance is not a luxury, but a necessity. When it comes time to purchasing a new home, securing a mortgage or even buying an apartment in a co-op, home insurance may be a mandatory qualification for sealing the deal. Regardless, it is a smart decision to budget for this expense. Home devastation from “Acts of God,” forces of nature or criminal behavior can be more easily managed, both financially and emotionally if there is the safety net of home insurance in place.

With everyone operating on especially tight budgets, finding the best bargains on home insurance is a smart maneuver and Go Insurance Rates has some simple tips to help you find the most affordable home insurance coverage out there. When it comes to selecting your home insurance policy you can find the most budget friendly options by:

• Comparison Shopping – Consumers looking for affordable home insurance should take the time to research all the available offerings out there. Although many insurance providers offer discounts to consumers who have both auto and home insurance policies, discounts are not guaranteed and you may actually do better by having separate insurance providers
• Raise your Deductible – Like with any type of insurance policy, the more you are willing to pay out of pocket to manage your overall loss, the better the premium you’ll receive
• Pay in Full – If your budget allows, paying off the entire premium amount at the time of renewing your home insurance policy may save you some cash as you will pay extra for the luxury of making premium payments.
• Safety First – Smoke alarms, fire extinguishers, close proximity to a fire station and security systems will not only provide you with additional peace of mind, but may qualify you for additional discounts on your policy
• Insure Accurately – Everyone has a slew of electronics, jewelry, heirlooms and personal effects that they want to be reimbursed for through an insurance claim. However, it is extremely important that you accurately gauge the value of what you have as the cost of your home insurance is determined by several factors, including your overall maximum pay out amount
• Read the Fine Print – Make sure you read your home insurance policy for all the terms of the agreement as your provider may charge you extra for additional coverage or “add-ons” that you just do not need.

***Learn more about how you can save on home insurance rates with Go Insurance Rates.***

Florida Residents Will No Longer Benefit from State Farm Discounts

Posted in Home Insurance , Hurricane Insurance , Save on Home Insurance , State Farm

August 14th, 2009
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If Florida residents haven’t been hit hard enough with high homeowners insurance premiums – and storms to boot – now State Farm customers will be losing some much-needed discounts. According to the major insurance provider, in the next few months, customers will no longer benefit from certain5-20%discounts as it tries to better restructure its expenditures amidst one of the most severe US recessions in history.

So what are the discounts being eliminated?

• More than one policy. In the past, customers could benefit from having more than one homeowners policy – or by having more than one type of policy (homeowners, auto, etc.).
• Security systems. Unfortunately, those who have benefited from having security systems installed in their homes will no longer receive a discount.
• No claims filed. Whether by luck or by supreme safety on your part, if you never filed a claim in the past, you could have received a discount. Not anymore.

While checking off discount items on their list to eliminate, State Farm tried to work in the discounts for storm mitigation efforts; however, the Florida Office of Insurance Regulation (OIR) did not approve it – yet. Instead, it asked the insurer to refile the request after offering some “additional guidance” on how to do so.

The discount eliminations will be effective Nov. 1 for new business and Dec. 1 for renewal business. However, the insurer’s ultimate goal is to stop writing policies for the state of Florida altogether, a feat it has being trying to set in stone since the beginning of the year but won’t fully accomplish until 2011.

Best Ways to Save on Home Insurance

Posted in Home Insurance , Save on Home Insurance

August 5th, 2009
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If you’re a homeowner then you know you’ve got to have home insurance – your home is more than likely the most expensive thing you own, and taking risks on its safety is a bad idea. If you’ve got a mortgage (and who doesn’t?) then your bank is going to require it. The good news is that home insurance doesn’t have to be excessively expensive, and being aware of some of the best ways to save on home insurance is where you need to start.

The best ways to save on home insurance range from the obvious to the not-so-obvious. For example, if you buy a fixer-upper for a song, you might be excited by getting a “great deal,” but end up losing the money you saved because the place will cost more to insure. If the roof needs a lot of help, for example, it could be severely damaged or even come off in a major wind storm. Your home insurance provider is going to realize that, and hence charge you more. The same goes for the structural integrity of not just your roof but your entire home and land – if the lot you buy has issues, such as an abandoned foundation or other potential hazard, you could end up paying more for your home insurance policy because you’ve got potential liability issues. Before you buy your home, make sure you’re aware of its home insurance pluses and minuses.

Another good way to save on home insurance is to get your home insurance policy from an insurance provider you’re already working with. For example, you might get your car insurance from a company that also provides home insurance. In order to get your business, they might offer incentives to current customers that could lighten your premium load.

The most important and effective way to save on home insurance premiums, however, is to do your homework. If you’re looking to save money on your home insurance coverage – and most people are – you need to be researching the topic as thoroughly as you can before you commit to a policy. The more digging around you do, and the more questions you ask, the more chances you could have to find a great deal on home insurance and avoid overpaying for unnecessary protection like lawn damage.

How to Start a Neighborhood Watch

Posted in Home Insurance , Save on Home Insurance

July 15th, 2009
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Home insurance rates are based on many different factors, and one of them is the safety of the home’s general area. Since home insurance will cover items lost in a burglary, then it follows that home insurance providers take a close look at local crime statistics when determining how much it could potentially cost them to insure it. So, if you live in a neighborhood with a lot of crime, then you’re going to feel it in your monthly home insurance premium. While this may be discouraging for some home owners, the good news is that fighting neighborhood crime is something that is within your grasp, and you could be saving big on your home insurance rates due to it.

One way that home owners can join together as they seek to lower their overall home insurance rates is by creating a neighborhood watch. By getting organized and working as a team, neighbors can begin nighttime patrols that could thwart burglaries, and keep an eye out for each other as well as any suspicious activity they might see. Of course, they could do the same during daylight hours as well, since many robberies occur when home owners are at work. By creating a neighborhood watch, people will be taking a very important step in getting to know each other and making significant improvements to their overall quality of life – what home owner doesn’t want to see his or her neighborhood become safer for themselves and their kids?

If you’re interested in forming a neighborhood watch, whether it’s to lower your home insurance rates or just improve your sense of safety, get in touch with your local police station. They’ll be eager to work closely with you in order to lower local crime rates. You can also put up flyers all over the neighborhood to spark interest. Once you do this, be sure to notify your home insurance provider. There’s a good chance you could receive a discount on your monthly premium as a result.

Don’t Reduce Home Insurance Because of Reduced Real Estate Value

Posted in Home Insurance , Save on Home Insurance

June 22nd, 2009
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You may be more tempted than ever to take advantage of the benefit of a lowering home value by also lowering your real estate insurance, but experts highly frown upon this practice. Why, you ask? Because there’s much more to determining home insurance rates than the assessed home value.

The main issue associated with reducing the amount of home insurance you currently carry is that it covers things that home values don’t take into account. For instance, if you wanted to rebuild your home, the cost would be as much as 30%more than purchasing a new home as is, or building on an empty lot. This is because the cost of demolition, removal of damaged property, and even the hassle of working around existing landscaping can be pretty high. So if you are basing your home insurance on your declining home value, you might be disappointed if something requires rebuilding and you no longer carry enough insurance to cover it.

Also, when determining a home’s true value, the cost of the lot that it sits on is a factor to consider.If a home is assessed, the lot is usually not included in that assessment. As a result, basing your insurance coverage on the assessment alone could easily leave you under-insured.

This doesn’t mean that there’s no way that you can save on home insurance if your home value has lowered. But it does mean that it’s a good idea to work with your insurance company to determine the true value of your home, including rebuilding costs, to make sure that you actually insure the entire worth of your property.

What Does Home Insurance Generally Cover?

Posted in Compare Home Insurance , Home Insurance , Home Insurance Quotes , Save on Home Insurance

April 22nd, 2009
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Buying a home insurance policy and determining just what it covers is something that every homebuyer is faced with at some point. This is a valid concern for anyone who has to spend their hard-earned money. Of course, you dont want to waste money on a policy that doesnt truly protect your assets. But you dont want to lose your home and belongings because you didn’t acquire the appropriate homeowners coverage.

Prior to Purchasing Home Insurance

Before going out and shopping for a policy, it’s a good idea to first find out just what a home insurance policy will cover. This way, you can determine how much coverage you need and also estimate whether you need to purchase extra coverage.

Here is a brief list of what the basic home insurance policy covers:

• Your structure, including attachments to the house like a garage.
• Your lawn and landscaping.
• Vacant land that you own.
• You and your familys possessions, including items that you have borrowed but are keeping in the house.

Extra Home Insurance Coverage

In addition to the basics that a home insurance policy covers, here are some extra coverage options:

• Liability coverage. This addition to your policy can protect you in the event that damage to your home results in someone else being injured. It can also include injuries caused by a household pet (ex. dog bites).
• Dwelling coverage. This coverage pays for damage to a detached structure like a garage, shed, storage area, or fence.
• Loss of use coverage. If your home is no longer suitable to live in as a result of damage, a storm, or some other disaster, this coverage will pay your expenses until your home is livable again.

Home Insurance Exclusions

Be aware when seeking homeowners coverage that damage caused by earthquakes and fires is not covered. If you need this type of coverage, you will need to buy separate policies.

Obtaining the right home insurance policy is important to the security of your property and family. Call an industry expert or do your own extensive research before, but make sure you’re protected with a good policy. Also, be sure to compare home insurance policies to save money and know exactly what you’re getting.