House Insurance 1

Written by Ethan Hawke

If you are searching for cheap house insurance, start by understanding what you have and what you are currently paying.

Home insurance is sometimes labeled hazard insurance or homeowners insurance. This insurance covers the property associated with a private home. If you don’t understand your policy, call your insurance agent. Don’t forget to ask your agent what you can do to get a better rate. Sometimes it’s as simple as noting that your car insurance or life insurance is also through the same company.

But you can’t really compare rates unless you get apples to apples comparisons. If you have a $300 deductible now, but you get a rate quote for $500 or $1000, then of course the insurance will cost less. To understand where you can save money, first understand the options your insurance covers.

Structural Insurance

If a tree crashes through your roof, or a pipe breaks in the kitchen and floods the basement, the damage will be fixed because of your structural coverage. To make an informed decision on how much coverage you need, get an average of the square-foot building cost in your area. The information might be on the internet, or you may need to call a builder or a realtor. Once you have the figure, multiply the amount by the amount of square feet you have in your home. This is approximately what it would cost to replace your home today.

Liability Insurance

Someone slips on your icy steps and breaks their leg, or your tree falls on the neighbor’s roof. Liability coverage pays for that. It covers damage done to others and their property when it’s your fault. If somebody sues you for that damage, it also pays for legal fees. If you have a lot of assets that you could lose in a law suit, you need to have at least $300,000 to $500,000 of liability coverage. If you don’t have many assets, consider $100,000.

Personal Property Insurance

Anything in your house that is not part of the structure is personal property. Your furniture, clothing, electronics and appliances are all personal property. Go from room to room and take a personal inventory on what these items would cost today. If the house burns down, this is the amount of money you’d need to replace everything you own. You might need riders for the more expensive items like jewelry, furs, antiques, and collectables. Check what policy limits are and think about what you may need to cover.

Off-Premises Insurance

If the tree in your roof makes it impossible to stay in the house, this coverage pays for basic living expenses. This coverage can be very important if you live in a high risk area for natural disasters.

The insurance coverage on most homeowner’s policies won’t cover floods or earthquakes. You will need a rider or extra coverage if you live in a flood or earthquake zone. If you are comparing coverage, don’t forget to get comparative prices on the riders.

Getting Cheap Insurance

Now that you know what you’ve got and how much you’re paying for it, it’s time to get additional quotes. Insurance rates can vary a great deal from one company to another. Sometimes your basic insurance will be cheaper with one company, but if you need an earthquake rider, the basic company either won’t have it, or it will change the competitiveness of the policy. But taking the time to check, looking at the options and asking what type of discounts you can add to the mix, will help you discover the cheapest policy that meets your needs.

Comparison Shopping

In the age of the internet, it’s never been easier to get comparison quotes. There are several insurance comparison websites out there where you can plug in your numbers and get rate quotes from a number of different companies. Some of these sites have insurance professionals that will answer questions over their online chat service.

Once you’ve compared the rates of what you currently have, start changing things up. Request the highest deductible that you can afford and run the quotes again. Make sure you look at the information for each policy that explains their discounts. I get a discount for my cheap house insurance because my life, auto and other insurance is with the same company and I’ve been with the company for years.

Each insurance policy gets what is called a ‘multi-line’ discount and a get a discount for being a long time customer. If I change companies, those discounts may not be available so I need to compare what I’m paying after discounts with the new quotes.