Avoid Small Claims And Save On Home Insurance

Home insurance costs are like everything else, with the costs spiraling upward and no end in sight. Recent years have brought some big disasters in America, with the hurricanes, tornadoes, and earthquakes that have caused millions or even billions in damage. Because of this all home insurance prices have gone up, but there is one proven way to save on your policy without sacrificing coverage, and this involves your deductible amount and claims for small amounts. Many people choose a low deductible because there is less out of pocket expense if a claim arises, but this can cost you hundreds of dollars or more each year, and the odds of needing to file a claim are small. There is a method you can use which will give you much lower premiums and allow you to save on home insurance.

Determine the highest possible deduction that you could reasonably afford, and choose the next highest deductible amount for your home insurance coverage. Now take the first deductible amount, the one which is reasonable, and put it in an interest bearing savings account. Stay away from extremely low deductibles, such as two hundred and fifty dollars or five hundred dollars, because these will raise the policy premiums by as much as twenty five percent. Each month take the savings you see on your home insurance premiums because of the higher deductible and add that to the savings account. You do not have extra money in your pocket at this point because of these savings, but that will change soon. Each month you will earn interest on the account in addition to the extra amounts added, and these interest payments are another way you will enjoy savings on home insurance with this method.

This next step will give you great savings on your home insurance coverage. When a small claim occurs, do not turn it in to your home insurance provider. Instead, use some of the money in the savings account to repair the damage without ever turning in a claim. Consumers who have no claims in the past three to five years will enjoy lower rates on their home insurance. After a couple of years with the same home insurance provider, your rates will go down even further because of non stop coverage with the same company and having no claims filed. If a claim is less than double your deductible amount, or at least a couple thousand dollars over the amount of the deductible chosen, then filing a claim will cost you more in raised home insurance premiums than you will save by filing a claim. Many home owners do not realize it, but even a claim worth a few hundred dollars will cost you hundreds, or even thousands sometimes, more in monthly or yearly home insurance costs.

It is also important that routine maintenance and repairs are done to your home, to keep it in good condition and prevent problems which can occur from poor upkeep. A well maintained home will cost less to insure with home insurance than a home which needs major repairs or has structure damage already.