Homeowner’s insurance is important to your financial security, but the dizzying array of options and policies can be complicated and unnecessarily costly for those who aren’t careful. Whether you’re purchasing insurance on a new home or renewing an established policy, your first order of business is to determine whether the coverage guarantees replacement costs or if has a cash limit. If your property value goes up, either through appreciation or improvements you make, you should ensure that coverage goes up as well. Include in your calculation any new big ticket items such as electronic equipment or appliances. After you have determined what level of coverage you need, consider the following tactics for minimizing your premium costs:
• Install security alarms and dead-bolt locks on all exterior doors. Many policies will reward customers who take extra security measures.
• Place smoke detectors on every level of the home and have fire extinguishers handy in both the kitchen and bedroom area. Aside from adding to your own safety, these minimal expenditures can reduce the cost of the policy.
• Consider raising the deductible—the amount you would need to contribute if you submitted a claim. If you are comfortable with the idea of paying more out of pocket, you may be able to lower the premium considerably.