To the average American family, a home can be a great asset to have. It can be purchased at a price lower than the market price and resold at a higher markup after some modifications. Or it can be put up for rent, earning passive income over an indefinite term. It can even be sold after being lived in for a family’s lifetime at a decent price, since the market values of homes are almost always appreciating.
But homes can also easily become a financial liability. Purchasing a home does not exactly come at the same price as a cup of instant noodles. Therefore, if something were to happen to it, the financial loss could be crippling. This is where home insurance comes in.
Home insurance is a way to protect the financial investment of a homeowner should their home be damaged or destroyed. While this can be an added financial burden, there are ways to protect a home without breaking the bank.
Consider more than one provider
While there is an average asking price, insurance companies often provide different price points for home insurance. Any homeowner looking to save some dollars on their home insurance policy might want to consider getting a quote from more than one insurance company.
Talk to friends, family, even colleagues on who their providers are. Do research online; the National Association of Insurance Commissioners has resources that can help make the selection process easier. Shopping around can take some time, but it’s well worth the effort.
Bundle your policies
Protecting a home can be financially wearisome, especially if there are other assets that need to be protected. Insurance companies usually offer discounts for homeowners who not only take up a home insurance policy with them, but also get their auto or life insurance policy with the same company. Allstate home insurance quotes, for example, offer a multi-policy discount of up to 25% for homeowners who choose to take up both home and auto insurance with the company. This rate can vary from company to company as well, so again, feel free to shop around.
Raise your deductibles
It may seem counterintuitive to most policy owners, but raising the deductible can actually help lower the cost of having home insurance. For reference, a deductible is the money a policy owner pays out of their pocket when a claim is filed with the insurance provider.
Insurance companies can provide as much as a 25% reduction on the monthly premium depending on how high the deductible is raised. It’s also important to note that raising the deductible can be risky, especially if money equivalent to the new deductible isn’t readily available in your bank account; make sure money gets squared away through automatic savings accounts.
Getting home insurance, and maybe even insurance in general, might not seem like the most important thing to have given all the daily expenses that need to be taken care of. It is however, important to understand the consequence of not having home insurance, as it can lead to serious financial consequences in the long run. Getting home insurance at the most affordable price can be taxing, but getting the same quality of protection for your home at a lower cost is certainly worth it.