Unless you're insanely rich, paid for your home with cash, and enjoy gambling with both Mother Nature and the arsonists who hang out behind the movie theater on Friday nights, you should have homeowner's insurance. In fact, if you have a mortgage, your lender requires it.
Covers your house, detached structures (like a garage), and personal property inside your home (like your couch or your spouse ... just kidding, Dear). You'll be reimbursed based on replacement value ($1,000 for a new couch) or actual cash value ($.34 after your cat peed on it).
Covers your butt if someone is injured on your property and sues you.
Ways To Lower Your Premiums
Everyone doesn't pay the same price for insurance. Below are a few ways to lower your premiums (your monthly cost).
Raise your deductible. Deductibles are the amount of money you have to pay out of your pocket before the insurance company steps up.
Only get coverage for the cost to rebuild. When you buy a home, you're paying for a house and land. Your land won't burn down.
Love your insurance company. If you buy auto and home insurance from the same company, you often get discounts.
Improve your home. If you add storm shutters, install a burglar alarm, modernize your electrical, and so on, you may get discounts. Ask for discount opportunities.
Pay all of your bills. Insurers are increasingly checking credit scores to price insurance. If there was ever a time to return your overdue library books, it's now.
Bert's insurance company offered discounts on homeowner's premiums for customers that lowered their chance of a loss. "If they think storm shutters and burglar alarms are worth money," he thought, "wait until they see what I have up my sleeve." Bert's dubious loss-prevention steps included:
- Bright red rubber floors and walls
- An alligator-filled moat
- Water-filled furniture (It never catches on fire.)
- An ark loaded with two of every one of his possessions
The insurance company didn't give Bert any discounts for his innovations, but they gave him a sticker for his effort.