Homeowners insurance coverage tips and techniques

According to the Insurance Information Institute, fire, lightning, wind, hail, water damage and freezing comprised between 78.1%-85.9% of all insurance claims between the years 2003-2007. Additionally, the Insurance Information Institute states claim frequency averaged 5.83% for those same years So what these means for homeowners is that the greatest chance of damage to a home is related to mother nature. In the case of flood and earthquakes, these are also often excluded from standard insurance policies.

Even though national averages of insurance claim statistics convey a high probability of natural hazard on average, they do not necessarily pertain to local and regional locations. For example, Texas is one of the most expensive states to have homeowners insurance due to the increased probability of specific types of insurance claims. The following homeowners insurance coverage tips may save you money by reducing coverage redundancy, lowering premium and choosing the right homeowners insurance coverage.

Weigh insurance riders against umbrella coverage

Sometimes all the additional homeowners insurance you may need may be included in what is called an insurance rider. Riders, also called endorsements, are additions to your homeowners insurance that provide an insurance coverage more suitable for your needs. If homeowners insurance riders give you the protection you need for less cost than umbrella insurance it may be a better choice. The same principle holds true for umbrella insurance.

Consider insurance directly, with agents and brokers

Homeowners insurance can be bought without an agent or broker if purchased from an insurance company directly; for example, Geico is an example of a direct mobile home insurance provider. Agents may provide you better and more personalized service for a reasonable price whereas brokers may do cost comparisons for you. When shopping or switching home owners insurance coverage, consider the advantages and disadvantages of each insurance provider option. Assessing their costs, and services in relation to your home owners insurance needs can be a decision worth living with.

Prioritize security and prevention

The U.S. General Services Administration states lowering risk probability through home improvements and increased home security can potentially lead to between 5-20% and sometimes more home owners insurance cost savings. By asking your insurer what the greatest factor contributing to your home owners insurance is, and making the appropriate changes to your home, your home owners insurance could end up costing less than the cost of the home improvements. Additionally, these  home improvements may have the double benefit of increasing the home’s value and reducing taxes through qualifying home improvement tax deductions.

Appraise and inventory valuable assets

A home insurance company can’t pay you if you don’t have a record and assessment of your assets. If you have valuable assets in your home it is a good idea to appraise, document and inform your insurer of the assets. This prevents disputes and helps justify claims when and if they occur. In the case of highly priced assets, a certified jeweler, professional appraiser, or an insurance agent may assist with the valuation and documentation of your belongings.

Smoking and fire safety equipment

If you smoke, there’s a chance your homeowners insurance could cost more. According to the U.S. Fire Administration, a division of the Federal Emergency Management Administration (FEMA), close to 1000 people die every year from smoking related accidents in the home. By installing insurer recommended fire safety equipment and choosing safer alternatives to smoking such as electronic cigarettes, the same benefits of smoking may come at a cheaper price and less risk.

A.W. Berry -HomeownersInsurance.org Expert A.W. Berry is a published personal finance writer with an interest in all kinds of money matters. His professional background in finance, marketing and sales directs his reporting to pertinent local issues.