Homeowners Insurance: Offset Your Rising Mortgage By Saving On Homeowners Insurance

July 24, 2007 | By: Matt | Comments (0) | Posted in: Homeowners

We hear and read about it in the news every day: rising interest rates are punishing homeowners that participated in the adjustable-rate home loan phenomenon over the past half-decade. Adustable-rate home loans account for almost 25%, or roughly 10 million of all mortgages, according to a 2006 USAToday Study. Attracting consumers with low down payments, and interest-only payment options, risky adjustable-rate loans gave millions of people the means to purchase a home that was otherwise out of their financial reach. In fact, RealtyTrac.com reported that there were 164,644 foreclosure notices filed in June 2007, up 87% from June of last year.

In the struggle to escape foreclosure, some homeowners will make simple adjustments in their daily lives by conserving energy and vacationing closer to home to save some money. Others, however, will be forced to drastically scale back their expenditures on not only frivolous items, but on necessities as well. Unbeknownst to many homeowners, comparing homeowners insurance quotes is an effective way to find savings that can alleviate the financial stresses of owning a home.

Homeowners Insurance and Mortgages
As far as many new home buyers have been concerned, their homeowners insurance policies are bundled into their mortgage payment. Satisfying the lender's prerequisite that the premium be paid for the first year at closing, shopping around for the best rate may not have been a reasonable option at the time. Given the current state of rising interest rates though, the need for shopping for a new homeowners insurance policy has never been more justifiable. It's easier than shopping for a mortgage and there are numerous ways for homeowners to save, easing the pinch created by skyrocketing mortgages.

Consider Raising Your Deductible
Increasing your deductible by just a few hundred dollars can make a significant difference to your premium. Most deductibles start at $250, therefore, if you raise your deductible from that to $1,000, you may to save nearly 25% on your premium.

Look for Multi-Policy Insurance
Most insurance companies that sell insurance products other than homeowners insurance will offer consumers discounts for buying more than one product from them. For example, if your auto insurance company also sells homeowners insurance, you might get a discount of up to 15% off your premium for buying both products.

Only Buy the Homeowners Coverage You Need
Homeowners insurance policy limits should be revisited every year to reevaluate any major purchases and additions. On the other hand, many of the possessions that homeowners insure depreciate significantly over the course of a year. Homeowners should update their home inventory, and reevaluate policy limits for possible savings. Further, homeowners shouldn't spend money for coverage they don't need. For example, if you don't live in a flood-prone area, you may not need costly flood insurance.

Look For Discounts That May Apply to You
There are a myriad of homeowners discounts that go unrecognized by many consumers. For example, even though they seem ordinary, you may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire retardant roofing material.

Insure Your House, Not the Land Under It
Consumers often overpay for homeowners insurance by including the value of the land that their home resides. Remember that you only need to insure the home itself and your possessions, not the land. Should something unfortunate occur, the land will most likely remain. If you do not subtract the value of the land when deciding how much homeowners insurance to buy, you will most likely pay more than you should.

Homeowners insurance premiums can vary by hundreds of dollars from one company to another. Using InsWeb.com's online quote form, you can easily shop for and compare multiple homeowners insurance quotes from the comfort of your home.

 

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