House value way up? Check your insurance – InsuranceNewsNet

The good news is that your home has never been worth so much. This takes some of the sting out of the fact that the stock market is down and you’re now working ten years longer than planned.

But take heart. The rise in property prices is real. In 2021, the average U.S. home gained 17.1 percent, a record high, according to CEIC Data, a market research firm that has tracked home prices for 30 years. That’s something considering the compound annual growth is 5.3 percent. So go ahead, celebrate your home equity boom and get your merry dance out of your system because now comes the bad news:

If your house has increased in value, you are probably underinsured.

“Construction costs have increased along with home prices,” said Laura Adams, a personal finance and insurance analyst at Clearsurance, an online platform that helps consumers shop and compare insurance plans to find the best value. “You’re only insured to rebuild your home for the amount of coverage you have, and with the cost of construction rising, many people don’t have enough home insurance coverage to do that.”

Too bad. I know. It’s such a bore. They hate paying for insurance and so do I. The last thing you need is another sleep-losing problem. But you would be really miserable if your house burned down and you found out you were only covered for replacement value when you took out the policy when the house was worth a lot less and construction costs went even further. Sigh.

Before you stick your head in a tub of vodka, however, Adams has a better idea. While you’ll likely need to check with your carrier to make sure your home coverage is enough to cover the full replacement value of your home, meaning your rates will increase, you can also use some strategies to lower your insurance costs.

“The rate you pay for home insurance depends on many factors,” Adams said, “including the type and amount of coverage, location, and features of the home.” She then offered the following 13 often-overlooked ways, Reduce the cost of homeowners insurance even if you need to increase coverage:

Replace old plumbing. When you renew your plumbing and repair leaking pipes, you reduce the risk of significant property damage from a burst pipe. Let your insurance company know if you are renovating your plumbing.

Replace worn electrical systems. Since degenerating electrical systems are a leading cause of home fires, installing a new electrical system will reduce your risk of fire and could also lower your premium.

Get a new roof. Household damage from a leaking roof is another common and costly claim, so insurance companies reward those who have a new roof. When we replaced our worn roof last year, our insurance premium dropped about 10 percent.

Reinforce your windows against disasters. Enhanced features like storm shutters and impact-resistant windows help protect homes from high winds, hail, heavy rains, flying objects, and other damage that comes with weather-related disasters.

Install a security system. Many smart home devices help people save money on their policies and avoid insurance claims. Technologies that can result in insurance discounts include professionally monitored security systems, security surveillance cameras (including doorbells with cameras), intruder alarms, and water sensors that trigger a water shutoff if a pipe bursts.

Bundle your coverage. Ask your agent about purchasing more than one type of insurance policy from the same carrier, or about purchasing what is known as a multi-line policy. Bundling your home and car or life insurance with the same carrier often results in significant savings.

Look for affinity discounts. Find out if your employer, or a professional or alumni organization you belong to, has a relationship with an insurance carrier that offers a discount to which you may be entitled.

Maintain good credit. With a good credit rating, you can save money on insurance in many states.

Increase your deductible. The higher your deductible, the lower the premium usually is.

Play the age card. Retired homeowners over 55 can often qualify for lower rates.

Do not smoke. Smokers often pay significantly higher insurance premiums.

Marry. Married homeowners usually pay less than single people.

Browse around and then be loyal. When you are looking for home insurance, you can browse and compare rates, discounts and rates. Once you have decided on an insurer, stick with the company. Loyalty is often rewarded with lower premiums.

Marni Jameson is the author of six books on home and lifestyle including Downsizing the Family Home – What to Save, What to Let Go, Downsizing the Blended Home – When Two Households Become One and What to Do With Everything You . Own it to leave the legacy you want.” You can reach her at marnijameson.com.

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Marni Jameson

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