Review home owner’s insurance policies (including flood policies)- This especially applies to people living in Florida and coastal states where insurance premiums have skyrocketed by 25-50% in the past few years due to increased property damage due to hurricanes. Review your declarations page which explains your coverage and reflects your premium (1-3 page policy of coverage). I personally saved $1,200 hundred dollars this year in October on my home owner’s insurance by using these steps.
This is especially important for those who pay their insurance escrowed into their home loan. You may not be aware of the amount you are actually paying for your home owner’s insurance since it is wrapped into your monthly mortgage payment. If you house payment has increased over the past few years it may be from insurance premium increases.
Review your policy (declarations page). Call your current agent and ask them to shop your policy around to other insurance companies. Many insurance agents do have access to several companies and may be able to save you hundreds or more off your yearly insurance premiums. The best part is that they already have your information on file making it easy. If you are not happy with your agent’s quote shop around to at least 2 other agents. You would be surprised how much an agent will save you to gain your business. I personally saved $1,200 off my policy. I was amazed that my 10 minute discussion with my agent produced such great results. She shopped around and found a new company that was able to offer the same coverage for much less.
I paid the premium faxed in the new insurance declarations page (proof of insurance and paid receipt) to my current mortgage company and cancelled my old policy. I received my refund in about 2 weeks and stuck the $1,200 savings in the bank!
Steps to saving money on home owner’s insurance:
1. Gather Home Owner’s declarations pages2. Review your current policy and shop for lower quotes3. Pay for new policy, cancel old policy
4. Cash your refund check 2 weeks later
What if I have recently replaced my roof? You may qualify for a discount. Many insurers will ask for a roof certification from a roof inspector. Most inspections run $200-300 and could save you even more money off your policy. Check for any recent hurricane protection upgrades such as shutters, or hurricane glass. The insurance company doesn’t know unless you tell them. This step may save you an additional 10-15% off your home owner’s policy.
What if I have lender forced placed insurance? I would do this as quickly as possible. Your savings will be slightly less for the first year. Forced place lender insurance only covers the lender of loss and is extremely expensive. Many homeowner’s don’t realize that they are overpaying, and getting “forced place” insurance. It is similar to obtaining car insurance without prior coverage. You will generally be charged a 10% premium for no prior coverage (12 months prior). The following year your premium should drop or you may shop around to obtain an additional 10% savings.
Does this work if I escrow my insurance? You can still save this money if you currently escrow with your mortgage company. Contact your mortgage company’s escrow department and ask them for their fax number. They will pay for the new policy. You will sign over the refund check to your mortgage company to fund your escrow account. You may request the savings to be refunded to you within a few weeks.
What if I don’t have the money to pay thousands up-front or don’t want to use my own money? I used a credit card for my premium. I received my refund before my credit card payment was due. I paid the credit card in full and kept my $1,200 savings. The key is to use a card that doesn’t have a balance and you will receive 30 days without interest. Using the bank’s money to save me money is fun!
I pay it on my own but, what if I don’t have credit cards, or the cash to pay for this now! You may have just paid this premium recently making it tough to come out of pocket for thousands more. I suggest reviewing your home owner’s insurance policy the month before it renews. That way you are prepared to pay it as usual. At worse borrow the money from a relative or take a free no cost line of credit to save the money. See how much the savings is, then find a way to get the money to pay for the premium and refund the extra savings.
Review your savings in your complete financial picture.
$100/ month
$1,200 per year
Over a 30 year home loan I will save $36,000!
Check out more of Brian Schoedel’s posts/ articles on saving money!
Brian M. Schoedel
E-Mail: briansellsmortgages@gmail.com
www.briansellsmortgages.com
