Doctors advise us to have a physical and various annual tests to make sure our bodies are healthy. Financial advisers suggest we take a look at our credit reports once a year to make sure our credit rating isn't being compromised. And of course, we change the batteries in our home's smoke detectors once a year to make sure we will be altered in case of a fire. But how many of us have purchased insurance policies over the years, whether it's for our life, our business, our health, or our cars, and stored the information neatly away in a filing cabinet where it remains untouched for years. I'll raise my hand and admit that pretty much describes how it's been in our family. Every year or so I'll revisit our health insurance policy to see if there are ways I can save some money on that, but it had been over 5 years since we revisited our homeowners insurance policy. So today we made a long over-due call to our agent to discuss our policy and the coverage we've been paying for.
First a disclaimer: I'm not an expert in insurance and I don't pretend to be one. So before you make any changes to any of your insurance policies, have a conversation with your insurance provider about your needs and your particular situation.
A good place to start the conversation about your homeowner's insurance is with the valuation of your home. The market value of your home and what it would cost to replace it are two of the driving factors in determining how much your insurance costs. But the housing market and building
industry have changed dramatically in the last 5 years and your policy may be based on numbers that are no longer accurate. We are a perfect example of that. Back when we got our policy, we had an appraisal that placed a higher value on our home than it would today simply because of the sagging real estate market. The replacement cost (the cost to rebuild our home if it was destroyed) has also changed. Five years ago, when the building industry was cranking in our area, building costs for a new home were running somewhere between $200-$300 a square foot. Today, that cost is more like $150-$175 a square foot, maybe less. Those two changes affected not only the insured value of our home, but also the insured value of our personal belongings since that figure is based on a percentage of the home's value.
By the time we ended the phone call to our agent, we were able to save over $400 a year on our homeowners insurance by making simple adjustments to those valuation numbers. We didn't change anything else about the policy and even lowered one of our deductibles. Of course, if the housing market rebounds and the building industry in our area ever recovers, we'll want to revisit these numbers again to make sure we aren't under insured.
There are other things you can do to save money on your insurance, like grouping your auto insurance with your homeowners insurance. Insurance agencies love to have all of that in one place and will generally give you discounts if you let them insure both your home and your car. Of course, individual policies will vary and my original disclaimer is still in affect. I'm not an insurance expert. But I am getting to be pretty darn good at finding ways to save money. Make the call to your insurance agent today and maybe you could some money, too. Besides...You don't have to be an expert to appreciate saving money these days.
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