It pays to review your homeowners insurance policy.
Insurance is part of everybody's financial plan. I recently received a bill for my Allstate homeowner’s insurance for $1,734. I pay this premium annually and don’t usually think twice about it as I drop the check in the mail. This time, I decided to call Allstate and ask them if there had been an increase because I remember last year’s bill being in the fifteen hundred dollar range.
As it turns outs, I was right and the premium for my Glen Ellyn home last year was only $1,534. The 13% premium increase without any claims was disturbing so I inquired about what was going on. The Allstate representative I spoke to said it was an across the board increase. I balked at the increase, but there was nothing she could do to help.
My next step was to inquire what the policy coverage entailed and if there was anything we could do to lower the premium. I found out that we had a rider for my wife’s (Soni) diamond earrings on the policy. Unfortunately, Soni had lost the earrings, one a couple years ago and the other last year. We never made a claim and with the $1,000 jewelry deductible it did not make financial sense to file a claim. If I filed a claim for the earrings I would have lost the 15% “no-claim” premium savings ($225/year) I currently benefit from. Think twice before insuring all your jewelry, it might not be worth it!
I also inquired about the cost savings of increasing my main deductible from $1,000 to $2,500. I figure if my house burns to the ground or a tree falls on it the extra $1,500 wouldn’t be a big deal. I hit the jackpot.
Increasing the deductible saved me $375 per year!
That’s significant. I wish my Allstate agent had been more proactive in letting me know about this cost saving option.
Bottom Line: Review your policy to make sure the coverage is up to date and analyze if it is worth it to increase your deductible and save on premium. Don't wait for your agent to bring up ways to save you money.
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