Costs

The cost of obtaining homeowner?s insurance depends on what it would cost to replace the house, as well as other items that are insured. The payment from the insured person to the insurer is called a premium. If you are the one purchasing insurance, you must pay the premium to the insurance company according to the type of payment schedule in your contract.

When calculating the amount of premium you must pay, the insurers take into consideration the likelihood of potential major damage or costs. Most insurers generally charge a lower premium if it appears that the insured property is less likely to be destroyed or damaged. For example, if your house is situated next to a fire station or is equipped with a sprinkler system and fire alarms, your premium will likely be lower than houses without those products and houses located far away from fire stations.

Required insurance for homeowners

Most home buyers borrow the cost to purchase their home in the form of a mortgage. In most cases, the mortgage lender requires the buyer to purchase homeowner?s insurance as a condition of the loan in order to protect the bank if the home were to be destroyed. Anyone with an interest in the property should be listed on the insurance policy in order to protect his interest in it. If not, his assets will not be covered in case of damage or loss.

Homeowners Insurance provides detailed information on Homeowners Insurance, Homeowners Insurance Coverage, Homeowners Insurance Quotes, Homeowners Insurance Companies and more. Homeowners Insurance is affiliated with Instant Home Owner Insurance Quotes.

Once you have determined what type of policy you would like to implement, you can begin discussing yearly and monthly costs with insurance agents. One thing to keep in mind while you are searching for Homeowners insurance is that the rates won?t vary that much between each company, but there are small ways to save a few dollars to a few hundred dollars, simply by finding some Homeowners insurance discounts that are available.

One of the easiest ways to receive a discount on Homeowners insurance is to install a home security system, and not the type that barks and growls. Many insurance companies are actually paired up with security companies like ADT or Brink?s and will give you a discount for using that insurance company and that security company as well.

Even if you get Homeowners insurance and decide to go back later and install a security system, don?t forget to go back and call your Homeowners insurance company once the system is installed so that you can receive a discount on your insurance. Further discounts may be given for motion sensors or even for video surveillance cameras installed on the home.

Another great way to receive a small discount on your Homeowners insurance is through fire and carbon monoxide detectors and fire resistant doors, brick and even walls. Remember that not all companies will offer the same discount for fire resistance and fire protection, so it is best to do research on how much of a discount can be received before diving in to remodeling the entire house for fire resistance.

Keeping up with newer appliances is another excellent way to help receive a Homeowners insurance discount. Older appliances are more likely to develop bad electrical connections, which can make the home susceptible to fire.

The first place to begin updating appliances is in the kitchen because kitchens are on the top of the list for places where fires begin. Many other insurance companies will offer a discount for new plumbing and electrical systems, or simply for a home that is less than ten years old altogether.

While some homeowners aren?t willing to consider a higher insurance deductible, or the price they will pay before the insurance will begin paying for loss or damages, asking for price quotes with higher deductibles is an excellent way to receive a discount on your insurance.

Most Homeowners insurance companies start out with a minimum deductible of $250 to $500 dollars, but try raising the deductible by $250 and see how much this will save you a year. Often times, this can make a difference of nearly $100-$150 a year on the total insurance bill.

Remember, though, that if you choose this route, you may end up paying more than that $150 savings a year if something happens to your home and you have to pay the higher deductible. Simply weight the negatives and positives and decide if a higher deductible is right for you.

The final sure fire way to receive a Homeowners insurance benefit is to belong to a club or certain group. This could simply mean being in the 65 and older club and receiving a senior citizens discount, or it could also mean already being a member of the bank where you are looking to purchase Homeowners insurance. Some insurance companies also give a discount if you plan on having both your car insurance and Homeowners insurance with that company.

Before settling for the first set of numbers thrown at you by the insurance company, be sure to ask about these discounts and make your assets work for you when shopping for Homeowners insurance.

Credit: Ian W Anderson of homeownersinsurance.cc, the homeowners insurance information site. For more homeowners insurance information and articles like this one visit: Homeowners Insurance

1. Estimate the total reconstruction cost of your home. Here are some factors, which will decide the cost to rebuilt your home.

a. Local construction costs.
b. The style of the house (colonial, ranch)
c. The square footage of the structure.
d. The type of exterior wall construction.
e. Number of rooms in your house
f. Cost of masonry, frame or veneer.
g. The type of roof.

2. Shop Around

Get information about homeowners insurance from various sources like relatives, friends, phone book and Internet. Do a comparison of all the collected data. While comparing any two companies don?t consider the price alone. Look for other benefits as well.Choose an insurer who offers both excellent service and fair price. Choose a reputed company with excellent financial rating.

3. Buy more than one policy from the same insurer

If you buy homeowners insurance along with auto insurance from the same company then the company can take 10 to 12 percent off your premium.

4. Improve Your Home Security and Safety

Install burglar alarm, smoke detector or dead bolt lock. Some homeowners insurance companies are associated with security companies and if you install security device in your home they can deduct your premium by 20 to 22 percent.

5. Look For Private Insurance First

If you are residing in areas that are vulnerable to fire, costal storms or don?t buy a government insurance without making some study. It is better to check with a private company representative or insurance agent. Some times private insurance companies provide better options in low price.

You can even apply for online home insurance quotes. Since your home is located in Arizona, you can apply for Arizona homeowners insurance. Online application is faster and saves a lot of your time to finding the best home insurance.

Looking for home insurance? We have all you need. Check it out on the best cheapest homeowners insurance rates and info source. All about homeowners insurance on http://www.leandernet.com

Could that level of disaster, especially that level of uninsured disaster, happen in California? Less than 15% of California homeowners currently carry earthquake insurance, due to its high cost, the ?can?t happen to me or my house? factor, and mortgage providers not requiring coverage. The next big quake will result in billions of uninsured damage ? but is earthquake insurance really worth the high cost?

How Did We Get Here?

The state of California requires that all homeowner?s insurance providers to at least offer earthquake insurance (albeit, at a high cost). Until 1994, it was widely available ? but the high damage costs of the Northridge earthquake resulted in 97% of homeowner?s insurance providers pulling out of the state the California. In response, the California Earthquake Authority was formed by the California legislator to provide earthquake insurance.

What Is the California Earthquake Authority, and How Does It Work?

The California Earthquake Authority provides two-thirds of the earthquake policies in California, sold through their member providers, like Allstate and State Farm. A homeowner purchases the policy through their regular insurance agent, but the policy is actually a CEA policy.

The CEA currently has about $7.2 billion to pay claims, which it states is enough to pay foreseeable damages (Loma Prieta in 1989 had $6 billion in total damages). If the damage claims are more than $7.2 billion, then each claim would be paid a prorated portion of their losses ? unlike a regular insurance company, which promises to pay the actual damages under the insurance policy. The state of California cannot help pay the claims out of general funds.

The policies also have a high deductible ? usually 15% of the value of the dwelling. In other words, your home must be damaged more than 15% of its value before the insurance starts paying. So, this insurance is not for cracks in the driveway ? it is for significant structural damage to your home. The policy also pays for limited contents (starting at $5K) and loss of use (starting at $1500).

Why Is Earthquake Insurance So Expensive?

Insurance policy premiums are calculated based on probabilities ? the probability that a house like yours in a neighborhood like yours will catch fire, or a driver like you will have an accident. With data from millions of homes, these probabilities can be calculated with reasonable accuracy. But, no one can reliably predict the probability that there will be an earthquake strong enough to damage your home.

And, as you can imagine, damages from an earthquake, flood, or hurricane, are widespread, over potentially thousands of square miles ? instead of one or a few dozen homes, as in a fire. As such, the insurer would have to pay either zero claims, or billions of dollars of claims ? too much variance to reasonably plan for or price accurately.

Are We Really At Risk Here in San Jose?

According to the USGS, there is a 62% probability that there will be an earthquake of 6.7 or greater (like the Northridge quake) in the Bay Area in the next 30 years. In my zip code (San Jose 95126), USGS calculates a 80% chance of a 6.0 earthquake and a 20% chance of a 7.0, in the next 30 years. Whether you consider that to be a high risk depends on your risk tolerance for earthquakes ? I consider that a high risk of a moderate earthquake and a somewhat low risk of a terrible earthquake, over the next 30 years.

But like any issue involving real estate ? it is all local. Where your home is actually located significantly affects your risk ? bedrock, reclaimed land from the bay, soil type, nearby streams, actual distance from the epicenter ? all can affect potential damage.

But of course, many earthquakes occur where the USGS was not even aware of a fault line ? and we never know when or where it will happen, until it happens.

Should I Obtain Earthquake Insurance?

Factors to Consider:

• Could you afford to pay for the rebuilding your home from your own savings & investments?
• Can you afford to pay the high cost of insurance, indefinitely?
• Could make payments on your current mortgage and on a new loan to rebuild?
• Can you mitigate your potential losses by bolting your roof to the walls and the walls to the foundation, for example?
• What is your tolerance for the risk of an earthquake?
• What is the risks of your current home construction (type, age, foundation)?
• What are the risks of your specific location (soil type, distance to known faults)?

Are the Costs Worth It?

Let?s assume that you have a home that would cost $250K to rebuild, you will own the home for the next 30 years, and your earthquake premiums are $1200 per year. Over the next 30 years, that would be a total of $36,000 in premiums (assuming your premiums do not increase, to simplify calculations).

Instead of purchasing insurance, you invest the premiums in a diversified mutual fund. With an 8% annual return, you would have $135,000 (pre-tax) in year 30.* But of course, you only have that total in year 30, not in year one ? meaning that if the earthquake happens tomorrow, you don?t have the money.

The deductible is another big turn off for many homeowners. The insurance pays only for large structural damage, not broken dishes or cracked driveways ? meaning that it is less likely you will use it. However, be aware that you will not need to come up with the cash for the deductible ? you may either opt to not undertake those repair or rebuilding costs, or you can apply for an SBA loan to pay for the deductible (assuming a federal disaster area is declared).

Why Not Just Get Federal Aid, or ?Walk Away? and Let the Bank Have the Property?

The federal government would probably provide access to SBA loans, if the area is declared a federal disaster area (no small business required). However, the $200K maximum SBA loan may not be enough to rebuild your home ? and, it is a loan that you need to pay back (in addition to your current mortgage).

If you have refinanced your mortgage, you have a recourse mortgage ? which means that not only can the bank foreclose on the property in case of non-payment, the bank can also come after your personal assets and future income in case of non-payment. So you cannot just walk away, especially if you have a good income and some personal assets. The bank may help out by deferring payments for a few months, but you still must pay back the loan.

Last Thoughts

We have earthquake insurance on our home. Our home was not yet built in the 1906 earthquake (so who knows if it would stand), it is 75 years old and is not bolted to the foundation, and we have a refinanced mortgage. For my family, the insurance premiums are worth peace of mind in case of a major earthquake disaster. That?s exactly what insurance is for ? the ?you never know.?

*calculations ignore inflation

Elizabeth Potts Weinstein, JD, a licensed attorney and Registered Investment Advisor, is the founder of Potts Weinstein Financial Consulting, a financial and estate planning firm, headquartered in San Jose, California. The firm specializes in providing fee-only, hourly financial planning, estate planning, and investment advice for people from all walks of life and income brackets. For more information about Potts Weinstein Financial Consulting, or to subscribe to our monthly eZine ‘Prosper!’, please visit http://www.pottsweinstein.com

1. Combine Policies. If you own a home and you own a car, purchase your insurance from the same company. Some insurance companies reward those customers who choose to bundle their insurance together with discounts as high as 10%.

2. Adjust Your Deductibles. Perhaps you don?t need a $200 home deduction. If you can live with a deductible of $500 or more you can save significantly from year to year.

3. Special Discounts. Depending on your age, there may be special discounts you can take that will also reduce your premiums.

4. Examine Your Policy. Oh, we do think they are correct ? right? Well, if your address is incorrect you could be paying more than you should. Check to make sure that your correct zip code is listed…it could cost you money if your insurer has you living in another neighborhood.

5. Abstain From Bad Habits. If you do not smoke or drink, make sure that your insurance company knows this. Your rate will drop accordingly if this is news to them.

6. Eat Your Losses. If you have a small claim, consider not submitting this information to the insurance company. Any claims you make can push up your rates down the road thereby costing your more in the long run.

7. Pay Now, Save Later. Instead of breaking up your premium into monthly payments, consider paying the entire premium at one time. Usually, insurers tack on a surcharge for the privilege of monthly payments.

You may also be able to save yourself some money by sticking with one insurer as they will reward regular customers with ?loyalty? discounts. In addition, it may pay for you to have an alarm installed on your car or home, especially if you live in a higher crime area. Finally, meet with your broker from time to time to see how you can reduce your payments.

Matt Keegan is The Article Writer who covers topics from business to human interest to politics. You can view his site at http://www.thearticlewriter.com

Here are some tips to get the best homeowners insurance rates.

1. First of all you should get the basic understanding about your home insurance rate and the different policies. You have to know who regulates the rate. It is the individuals of an insurance company who decide on the home insurance rates and these rates are regulated by the insurance department of the state. The state insurance department is the approving authority; it is only after their approval the rates can be passed on to the customers.

2. Before applying for homeowners insurance, you should shop around, so that you get the best homeowners insurance rates. To maximize your options you should make a search of your own. Enquire with your local bank, lenders and credit unions. Today, many banks have official websites; you can send your enquiry online. After completing your search, compare with those available in the advertisements. This will make it easier for you to get the best deal.

3. Some insurance companies provide more than one kind of insurance policy. For example, they will give you better rate if you buy auto policy along with home insurance. It also helps you get better home insurance rates.

4. Many insurance companies are associated with security companies like Brink?s or ADT, these companies offer you better rates if you install a home security system.

5. Not only better rates, you can even get discounts if you are ready to install motion sensors or video surveillance cameras in your home, provided by the associate companies of home insurance company.

While keeping these points in your mind, you can get the best homeowners insurance rates.

We have made a research on the subject of homeowner?s insurance. Check it out on the best homeowners insurance rates source. All about homeowners insurance on http://www.leandernet.com