25 Ways to Save on Home Insurance

There are many variables relative to a home that determine the rate that is charged for insuring the property. For example, homes constructed of Brick and that are detached from other homes, will get cheaper insurance rates than a home constructed of wood and that is attached on one or both sides. Also a 3 family home will cost more to insure than a one family home, as each unit adds another potential hazard with more stoves, kitchens, potential water leaks, and increased chances for human error that may cause a fire.

Below are some ways to save on your home insurance:

1) Purchasing a newer home will result in lower insurance rates.
2) Homes with flat roofs may cause more than homes with a pitched roofs as the later tends to protect more against leaks and collapses (i.e. from accumulated snow or ice on the roof).
3) Install a central alarm system (a system that automatically alerts the fire department or police if there is an emergency) rather than a local alarm. This can result in a decent discount, perhaps 10%.
4) When determining the insurance amount on the building, leave out the land as you are insuring just the building. Remember, the land does not burn and rates are based on the replacement cost of the building and not the appraised value of the property.
5) If you own vicious animals such as pit bulls, keep in mind that many insurance companies may refuse to insure your property or will charge higher rates, due to the increased liability.
6) Raise your deductible. By raising the deductible from say $500 to $2,000 you can save a respectable amount on your insurance. Remember, you are insuring against catastrophic loss, not to cover any foreseeable loss.
7) Verify if your employer offers a group discount arrangement (also called affinity group discounts) with a particular insurance company.
8) If searching for a home, try to avoid homes in a designated flood area as this will require you to also purchase flood insurance in addition to homeowners insurance.
9) If you do not desire to be a landlord, buy a one family home as these are less expensive to insure than a 2 or 3 family home.
10) Maintain a good credit rating as many insurers now rate based on your credit history.
11) Always insure on replacement cost (RC) instead of actual cash value (ACV), as the former provides more coverage in the event of a loss.
12) Don’t switch around. Some folks shop around regularly for lower insurance rates and this will only hurt them in the long run because many insurance companies reward those who stay with them over the long run, with possible discounts or loyalty credits down the road. Some insurers offer discounts once you have been with them for 5 or 6 years.
13) Make sure your home is secured by deadbolts, smoke detectors, fire extinguishers, and burglar alarm as these can help you get additional credits for a lower rate.
14) Consider a packaged policy. You should get a better rate by combining your home and auto in the same policy.
15) If applicable, always ask for a senior citizen discount.
16) Review your policy annually. Make sure that your property is insured for the correct amount to avoid that your property is underinsured, as over time the value of the property and its replacement costs will more than likely increase.
17) Remember, in most cases if you don’t ask you won’t get! So always ask first about all of the discounts that are available. If they don’t volunteer any, ask about specific items (i.e. central alarm system).
18) Upgrades. You will receive a better rate if the plumbing, roof, heating and electrical have been upgraded within the last 10.
19) Avoid frivolous claims. If you have had prior claims over the past 5 years, this will result in higher rates. So try to avoid making claims on small losses; hence the rationale for a higher deductible.
20) Sprinkler system. Although this may not be a practical expense for many, an indoor sprinkler system should provide for a hefty discount.
21) If you own more than one property, inquire whether you will get a package discount by insuring more than one property with the same company.
22) Verify if you will receive discounts for paying electronically via electronic funds transfer from your checking account.
23) See if you can get a discount by paying each year in full instead of by installments.
24) If you do not smoke, verify if your insurance company offers a non smoker discount.
25) When shopping for a home, try to find homes located closer to a Fire station (less than 5 miles), and that is situated close to a fire hydrant (the close the better).

I hope this article has been helpful.
By Robert Hernandez, President, Frontier Insurance Agency, LLC

Problems That Health Insurance Exchanges Could Create

However these Exchanges are riddled with certain intrinsic problems that have encouraged the skeptics to doubt the effectiveness of these state based insurance platforms. Here is a look at how these Exchanges can turn into complete disasters if the problems are not dealt with immediately.

States are eligible to almost a never ending supply of federal funds to set up these Exchanges. This move by the central government is to encourage the states to build their own Exchange. However, none of the states have the experience of building one before and the no dearth of funds allows states to experiments. This could mean a considerable amount of federal dollars going down the drain. The economic condition of the country and does not allow for such extravaganza. If the federal government does not keep a tab on the spending, the Exchange could prove to be a highly costly affair.

The central idea behind setting up an Exchange is to foster competition and to give more choices to the residents. But the strict guidelines could prove to be big deterrent and could drive away the insurance companies from being a part of the Exchange. This will result in the residents having fewer choices on the state platform and perhaps access to only government backed plans. This will complete defeat the purpose.

Another major concern is the guideline that the companies should have their cheapest plans on the health insurance Exchange. This will force the companies to cut down on the facilities they offer on plans that are bought through the Exchange. Though residents will have access to cheap plans, they will be second-rung at their best and offer only limited benefits. Such plans could turn out to be actually more expensive than some affordable health plans available outside the Exchange.

There are also fears that Exchange will function as any other government organization – pay scale of employees matching government standards, fixed work timings, weekend and other government holidays- interaction between the residents and the Exchange staff will be limited to non-holiday weekdays and only during the working works. The quality and efficiency of the staff employed in the Exchange is also under the scanner.

The federal reforms hope that the health insurance Exchange will revolutionize the way health plans are bought and sold in this country. However, if these teething problems are not fixed soon enough, then the these government based online platforms will end up doing more harm than good.

What Does Rhode Island Homeowners Insurance Cover?

Although there are variations from plan to plan, most Rhode Island homeowners insurance policies cover the major disasters that can befall a house. This includes fire, lighting taking out the central air conditioner unit, pipes breaking and causing water damage, or a tree dropping a limb and causing damage to the roof. Items such as these are covered under a general insurance policy, but damages that occur to your home as a result of a flood or an earthquake are not covered. In order to be insured against flood and earthquake damage special coverage must be purchased in addition to a regular policy.

Also, depending upon the area in which a house is located, many policies do not cover wind damage to a home. Many states have certain areas that are termed a ‘high risk’ for damages as a result of high occurrences of tornadoes, severe thunderstorms and hurricanes. If your home is located in one of these areas, your general insurance policy will not pay for damages brought on by the forces of nature. Unfortunately, after Hurricane Katrina, the areas deemed by insurance companies to be a “high risk” have grown considerably. Not only have the southern states bordering the Atlantic and the Gulf been affected by dropped policies and very high insurance premiums, the Mid-Atlantic and New England States have been negatively affected as well.

Although many homeowners’ insurance policies in Rhode Island have been dropped by insurance carriers after Hurricane Katrina, homeowners are still usually able to find insurance with other carriers, albeit at the cost of higher premiums and deductibles. However, the number of people in Rhode Island who need to be covered by state insurance pools has remained relatively low. A state insurance pool is a state-created insurer of last resort where the private market has dropped homeowners coverage or failed to provide initial coverage. It is operated jointly by private insurers who sell homeowners insurance in the state of Rhode Island.

Under this plan, the monetary gains and losses are spread out among the participating insurers. This insurance pool was designed to offer affordable insurance to those who cannot obtain it elsewhere. However, in the state of Massachusetts where 40% of the homeowners on the Cape must use their state insurance pool, this system is already asking to be allowed to increase their rates by 25%. Hopefully, Rhode Island will not follow suit.

OPTIONS WITHIN A RHODE ISLAND HOMEOWNER’S INSURANCE POLICY

REPLACEMENT COST OR ACTUAL CASH VALUE

Homeowner’s insurance companies offer policies based on the replacement cost of a home or its actual cash value. Most insurers (and mortgage companies) require that the home be insured for at least 80% of the replacement cost.

Replacement CostUnder this plan, if damages occur, the insurance company will pay the amount needed in order to repair damages or to replace an item. If there is a fire in your basement and your furnace needs to be replaced, the insurance would pay to have a new furnace put in, even if the furnace that was destroyed was quite old. Depreciation of the item’s value would not be taken into account.

Actual Cash Value- This plan works quite differently from a replacement cost plan. Under this plan if there is a fire in your basement and the furnace needs to be replaced, a cash value will be assigned to that item. The age and condition would be taken into consideration and If your furnace was ten years old, you would be given the cash value of a ten-year old furnace.

Most insurance companies cover your personal belongings (the contents of your home) on an actual cash value basis. However, if you are willing to pay a slight increase in your premiums, an option is usually available with many insurance companies that would allow you to insure your possessions for their full replacement costs. Even within these two parameters there are some limitations. Jewelry, valuable antiques, expensive plasma TVs, guns, computers, and money may have to be insured with additional coverage.

If you on a small boat it would be to your advantage to check around, as some insurance carriers offer insurance for small boats as a part of their homeowner’s insurance.

ADDITIONAL LIVING EXPENSES

If damage is so great to your house that you are unable to live in it while repairs are being made, most insurance plans offer to cover a limited motel stay, restaurants, and even some storage facility fees.

PERSONAL LIABILITY

Under personal liability you and your family members are protected against lawsuits and claims made because of negligence on your part. (The kids left the skateboard on the front door step and someone tripped over it and was injured.) It also protects against claims because of property damage, although this does not include vehicles.

MEDICAL PAYMENTS

This covers any injuries that may occur to someone on your property regardless of who is at fault. It does not however apply to you or any family member living in the home. There are also some exceptions that apply to activities surrounding an in-home business.

FACTORS TO CONSIDER

RI homeowners insurance coverage is designed to protect you from loss due to damage or destruction of your home. It’s important to know before you buy homeowners insurance what it would cost you to rebuild your home so that you can know what amount will adequately insure you home. What you originally paid for your home is not a factor in the equation. However, keep in mind, that although the value of the land upon which your house is built was included in what you paid for your home, that value is not part of the value associated with your homeowners insurance policy.

COMPARE RHODE ISLAND HOMEOWNERS INSURANCE RATES

Be sure that you shop around before you purchase. Compare RI home insurance quotes from at least 5 different companies before making a buying decision.