Surviving a Recession in Real Estate (Part 3)

The premium for home owner’s insurance is influenced by your credit and the replacement cost for the home.  Since your home owner’s insurance can be part of your mortgage payment it is important to know ways to decrease the premium to lower your  mortgage payment.   There are three ways to decrease you home owner’s insurance:

• Since it may take some time to improve your credit, a reduction in replacement cost is one way to decrease your home owner’s insurance.  Some insurance company can decrease your replacement cost to 80% of the replacement cost.  For instance, if the replacement cost is $100,000 it can be decreased to 80,000 as long as it is enough to pay off the mortgage and help you start over if the home is total loss.  Incidentally, this is not recommended for a long term solution to the increase in mortgage or insurance premium.
• Another way to decrease your premium is to increase your deductible.  Remember on homeowner’s insurance you do not pay the deductible before a claim is paid it is simply deduct from the claim.
• Still yet another way is to decrease your liability coverage.

There is an often overlook way to combat an increase in premium that is to find out what your home owner’s insurance when it is three months before your one year anniversary of the purchase of your home.  Your insurance agent should have your renewal premium amount.   If it is more than one hundred over your previous year premium shop for new insurance by calling other companies and get quotes or ask for the above changes to your present premium.