The last thing you want to be doing is overpaying for home insurance. Home prices have dropped drastically over the last couple of years, and many people are feeling the strain of the troubled economy. Fortunately, even if you are overpaying for home insurance, there are ways to remedy the situation.
Sign #1: You haven’t taken advantage of membership discounts.
If you are a member of AAA, AARP, NRA and other membership organizations, you might be overpaying for home insurance according to Wallet Pop. These organizations offer their members significant discounts – sometimes as much as 20 percent – on insurance products.
The only problem is that membership organizations usually have relationships with certain insurance companies. This means that if you want to take advantage of the discount, you might have to switch companies. You’ll have to decide if it’s worth the savings.
Sign #2: You haven’t upgraded your home.
Certain upgrades can prevent consumers from overpaying for home insurance. Outdated wiring, plumbing and heating systems, for example, can increase your homeowners insurance premium. Updating your home can often save you money on utility bills as well as insurance.
There will be an upfront investment if you decide to modernize your home, so you’ll want to run the numbers to see how much you’ll save and whether it is worth the money. Talk to contractors as well as your insurance agent to find out exactly where you stand.
Sign #3: You’ve valued the land as well as your home.
Many people are overpaying for home insurance simply because they don’t understand how their homes are valued. Your insurance should cover your actual house, including your garage and any unattached buildings, but not the land on which your house sits.
Fires, floods and other natural disasters might tear up your lawn, but you don’t need to insure it. Make sure your house is valued correctly for homeowners insurance purposes so you aren’t paying too much.
Sign #4: Other people pay less.
If your neighbors scoff at your homeowners insurance premium, you’re probably overpaying for home insurance. There will be small discrepancies depending on the value of the home and the insurance company you choose, but if your annual cost is significantly higher it might be time to shop around.
Sign #5: Your possessions have changed.
Most people add coverage for their belongings to their homeowners insurance policies. But if you sell a bunch of your expensive possessions or downsize in any way, you need to report those changes or you could be overpaying for home insurance.
Sign #6: You haven’t shopped around.
If you haven’t priced home insurance in several years, you’ve done yourself a great disservice. The insurance industry can change just as radically as any other type of business, so it pays to solicit quotes every few years. Find out what other companies are offering and whether you can save money.