If you are getting a loan to pay for your home, your lender will require you to buy homeowner's insurance. But did you know that almost all people who own their homes outright still pay homeowner's insurance?
People who own their own homes know how valuable their home is, and they want to protect it for good reason. The good news is that almost any homeowner can do a few simple things that will immediately lower the cost of their homeowner's insurance. Just be sure to tell your agent that you have done all or some of the following:
First, let's talk about the basics. You want to insure your house for the full amount it will cost to rebuild it from the foundation up, including the cost of replacing all of its contents. However, you don't want to make the mistake of insuring the value of the land your house is on. This land will not be destroyed.
Many people think that fire damage is the most common reason for a homeowner's insurance claim, but it's actually water damage. The most common homeowner's insurance claim is for flooding caused by a broken water line or a bad connection to an appliance that happens at night or while the homeowner is at work.
If your home is 10 years old or older, ask your insurance agent how much you will save each month if you make a one-time investment to upgrade your plumbing and electrical system. Check to see if the number makes sense. If so, go ahead and make some changes to your home.
Still, fire is a big problem, and there are things you can do to make your insurance cheaper. Brush and weeds should be cleared at least ten feet away from any building on your property. Buy the right number of fire and smoke detectors and put them in your home. Change the batteries twice a year. Buy a fire extinguisher that can be used in a kitchen and keep it in an easy-to-reach place. Add rope ladders to your home if it has more than one story so that you can get out quickly in case of a fire or other emergency.
Another big worry is burglary. Put floodlights around your property that turn on when someone moves. Cut back all bushes near windows so that thieves don't have a good place to hide. Install deadbolts on all the outside doors and make sure all the windows have locks that work.
Your monthly homeowner's insurance bill could go down by 20% or more if you have a home security system that checks for fires and break-ins around the clock. Check with your agent before installing a system, though, because not all systems qualify for the same discount on your insurance.
Also, fix or replace any broken concrete walkways on your property and fill in any holes. Replace worn or loose boards on decks and porches and fix or replace any loose railings.
There is a deductible on your homeowner's policy. The higher your deductible, the less you have to pay every month. Obviously, you have to be careful when you raise your deductible, because you have to be able to pay it out of your own pocket if you have a claim.
As a side note, you should know that most standard homeowner's policies in Alabama have a limit on how much they will pay for wind damage. Talk to your agent about what you can do about this. Also, you'll need to buy a separate policy for flood damage. Talk to your agent about what you need.
Now, go online and use what you've learned from this article. Find at least 3 websites that let you compare the prices of different insurance companies' homeowner's policies. Enter the same information into the form on at least three different websites, and then choose the company with the best price, assuming you are sure that this company will still be around in 30 years.
And you've done your job! You've now compared low cost homeowner's insurance in Alabama and found the lowest price you can pay and still get the coverage you need.
