In this economy, everything is getting more expensive. And with the skyrocketing costs of homeownership, how do you decipher how much you can afford on homeowner's insurance each month? Don't let high insurance premiums keep you from getting the home of your dreams.
Work out a Budget
Don't go through this process alone. You can either sit down with a financial advisor who is trained in this area of expertise, or a friend or family member who is good with numbers, too.
Write down all sources of monthly income and what percentage of it goes to your other bills such as credit cards, student loans, and car payments. You will also need to factor in the expenses of homeownership, such as monthly mortgage payments, utilities, and taxes.
Keep your credit score in mind, too, as this will most likely affect what you pay.
Deductibles Will Affect How Much you Pay Each Month
If your deductible is higher, you will pay much less each month than with a lower one. This means a lot more money in the long run if you ever have to file a claim, but your month to month bills with being lower in the short term.
However, if you live in areas prone to natural disasters, you may have separate deductibles for those parts of the policy. For example, if you live near the water in an area prone to flooding, your flood insurance may have its own, separate deductible.
Always Shop around and Compare Rates
This almost goes without saying. Why would you pay more to one company for the same coverage that costs less elsewhere? The best way to compare rates is to go through an agency that can evaluate numerous companies with your information and give you a list of the best rates, their deductibles, and how much coverage you are guaranteed.
Some companies, like Rob Jackson Insurance, know that you should make sure when comparing prices that you factor in how much each policy is worth. You might want to go with a slightly higher monthly rate and have adequate coverage than find yourself in a tough spot if disaster hits.
Besides increasing your deductible, there are other things you may do to lower what you pay for homeowner's insurance. Increasing the security on your home, making it more resistant to weather damages, or even revising your policy once a year can all help potentially lower your payments.
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