Looking for cheap home insurance? Well, if the price sounds too good to believe, here are a few red flags when making a buying decision.
1. If you are offered The Texas Fair Plan, be warned. This is a state funded bare bones policy, that usually does not include coverage for falling objects and sudden discharge of water, to name some. To qualify for the policy, you must have been denied coverage by three other companies first. Sure, the price might be good, but you are sacrificing coverage. And if this type of home policy is not being explained to you by the Agent, beware!
2. The Dwelling Reconstruction coverage is not only to rebuild or repair your home at the current cost of labor and materials, not including discounts a builder might get, but also the cost to remove debris, including the slab and driveway. Review the reconstruction calculation with your agent.
3. Often times the lender will request that you purchase a home policy with lodging coverage that is equal to or more than the loan. However, the policy only covers the cost to rebuild or repair and it's very possible that cost will not be enough to cover the loan. The bank would never be paid directly from the insurance company to pay off the loan. Plus, the land will always be there and is often the most expensive part of the home purchase. So, discuss this issue with your lender.
4. Try to bundle your policies for a discount. However, this is not always cheaper. Compare.
5. A roof less than 5 years old can often get you a discount.
6. An burglar and fire alarm monitored by an outside source may get you a discount. Often, proof required is a bill from the service that you use. Just because you have the alarm does not get the discount, but having it working service is what gives you the discount.
7. If you have a woodframe home, upgrading to hardi plank, brick or stucco could get you a discount.
8. If you home is 35 years or older, replacing 100% of the wiring and plumbing could get you a discount, or at least more companies to get quotes from to compare. Often times, proof is required. Either a copy of the invoice and payment made will work, or a letter from the licensed contractor would be considered proof.
9. Professional discounts are sometimes available, according to your type of profession. Proof would be a copy of your degree, license or certification.
10. Always ask for ways to lower your premium or other discounts available.
By David D Lorms
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