As if there weren’t enough bills to pay, you also need to budget for your home insurance. Not being insured really is not an option. Should something happen, you are going to seriously struggle to meet the bills. This could mean something major, like your roof being ripped off in high winds, not a broken pane of glass in the front porch. However, home insurance can, like all insurances, be expensive, and it can be tempting to compromise the level of coverage in order to get a lower premium. But, there is another way.
All home insurance policies will have a deductible figure, and this is set at an affordable level. However, if you can afford to increase this figure then you can seriously reduce the amount you pay in monthly premiums. What you are then doing is accepting that minor damage to your home is not something you are going to involve you insurance company with. For example, if you can afford $500 then you would not bother to claim for any repairs that come in at that level, or even just over that level. You accept that you will have to claim should the damage exceed this figure but once you do claim, you are also going to be hit with a premium increase the following year so you want to really make sure that claiming is the best bet. Many people accept certain elements of annual damage. They know that the cost of correcting them is not beyond their means; they simply accept them as such. They are safeguarding their home insurance policies at the lowest possible premiums but with the highest level of coverage just in case something major happens and they really have no choice but to claim.
However, a word to the wise! Keep the deductible realistic. Setting it at more than you can ever really afford is not going to help you in the long run. You may feel that home insurance borders on a waste of money, and indeed many years can pass without a need for a claim. It is therefore understandable and tempting to set your deductible amount to the highest level possible and pay little attention to whether it is a realistic amount. You might feel happy that you have not cancelled the policy but you have certainly reduced the premium. However, as fate would have it, you can be almost certain that this is the year that something will go wrong and you will be forced to claim. You may then find yourself in somewhat of a financial mess.
Shop Around You can shop around for home insurance, and it could well be worth doing so. It is probable that you will be required to show evidence that you do have home insurance but most mortgage companies do not require you to take the policy through them. Some require you to have their policy for the first year but after this, you are free to shop around. Consider whether the company has a limited deductible amount and whether this is significantly less that you were prepared to pay. Other companies do not, and you could find a better deal by shopping around for someone that has a higher deducible, more in line with what you considered you could realistically afford.
You could find that your property is in a high-risk area, in which case sadly there is little you can do. Being in a high-risk area for flood, wildfires and the like can all push premiums up. You can bring them down slightly by making an increase in your deductible but you cannot move your property. You more than anyone will need the insurance if you are in a high-risk area. It is going to have to be a case of accepting it.
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