It’s interesting to learn that California residents enjoy home insurance rates that are just slightly above the national average of $925 per year. According to ValuePenguin, an insurance rate tracking company, California residents are paying $996 per year on average, which is only $71 above the national average. Although many areas of the state boast multi-million dollar mansions, the majority of residents live in average homes similar to many other states. There are steps a homeowner can take to enjoy lower insurance rates and unless they are taken, many California residents are overpaying for home insurance.
Verify your proper Dwelling Limit
Many lenders encourage their borrowers to over-insure their homes by requiring that their minimum dwelling limit be equal to or higher than their mortgage. The problem with this method is that the lot or land the home is built on is typically included in the mortgage and your insurance company does not insure your lot. Your agent or broker will be happy to advise you on this subject and has access to a national computer program for determining your home’s replacement value based on the characteristics of the home.
Verify you Other Structures Limit
The majority of insurance companies will automatically assign a limit for Other Structures on your property at 10% of the dwelling limit. For example, if your home is insured for $350,000, your Other Structures limit will be $35,000. If you do not have Other Structures (unattached to the dwelling), you are paying for insurance you do not need and will never use.
Consider a Higher Deductible
Another way to reduce your home insurance premium is to consider selecting a higher than normal deductible. Most agents, brokers, and insurers will automatically select your deductible for you, and it is typically $500 to $1,000 dollars. If you are willing to pay more out-of -pocket if or when you have a claim, selecting a higher deductible will save you significant premium on your policy. Your deductible selection is up to you, not the agent, broker, or insurer.
Make Multi-Policy Purchases
Almost every insurer that offers multiple products is willing to offer a discount if you purchase more than one policy, such as home and auto. The additional discount will be added to both policies, making your savings substantially greater. Unless you are receiving an unbelievingly low rate with your auto insurer, place your home and auto business with the same company to enhance your discount savings.
There’s more to a safe home than smoke detectors and insurance companies are willing to offer additional discounts for California homeowners that go the extra mile. California residents should consider installing a monitored burglar and fire alarm system to reduce their premiums each year the system remains active. You will have peace of mind and save some money at the same time. Living close to a fire station or in a gated community will also deliver additional discounts because you are making an additional effort to be in a safer home.
Finally, keep in mind that your home insurance policy is likely to go up regularly. In fact, most insurers will add between two and four percent to your dwelling limit to accommodate the increase in replacement cost of your home. Knowing this, it makes very good sense to shop your home and auto insurance each year to make certain that you are getting the most competitive rates available on your policies. The only thing it will cost for shopping your policy at renewal is a little time out of your schedule.