What is your Homeowner’s insurance Game Plan?
Coaching tip: Just because you can submit a claim, doesn’t mean that you should.
For most families, the family home is the most expensive single tangible asset the family will ever acquire. Most families take 30 years to pay for a home. Losing a home to a fire or natural disaster would be a catastrophic loss. That's why people buy insurance. All insurance policy does is transfer risk from the homeowner to the insurance company. If a major loss, the insurance company pays so you don't have to. After all, buying insurance transfers risk to the insurance company.
So, what is your strategy for using home insurance?
Some people use home insurance policies as home maintenance policies; whatever breaks becomes a homeowner's claim. People who utilize policies this way usually end up getting cancelled after making multiple minor claims in a two to three year period. When they go shopping for insurance after a cancellation, they find that insurance is far more expensive. They have burned a bridge with a reputable company and now their only options are limited and expensive.
Insurance companies track every claim. The average homeowner files a claim every 15 to 20 years. Companies cancel policies for households who deviate from the norm by filing multiple claims in a short amount of time. Please can
Insurance companies track every claim. The average homeowner files a claim every 15 to 20 years. Companies cancel policies for households who deviate from the norm by filing multiple claims in a short amount of time. Please can
There is a better way.
First, play good defense. Make sure that your home is adequately protected. Don't scrimp on coverage. If the replacement cost for your home is $600,000, insure it for the full value. By doing this you transfer all of the risk to the company. If you have a major loss and the house is fully insured, the company has to replace your house.
Second, play good offence. Spend less on insurance over the years by carrying higher deductibles and allowing claim free discounts to build over time. With a higher deductible, the premium goes down. Carrying a high deductible is simply retaining a limited amount of risk.
Coaching tip: Have your agent quote insurance premiums at different deductible levels.
Claim free discounts can save as much as 20% of your premium each year. You can guard your claim free years by choosing a higher deductible. A higher deductible will be higher than most minor claims so you won't be tempted to file.
Second, play good offence. Spend less on insurance over the years by carrying higher deductibles and allowing claim free discounts to build over time. With a higher deductible, the premium goes down. Carrying a high deductible is simply retaining a limited amount of risk.
Coaching tip: Have your agent quote insurance premiums at different deductible levels.
Claim free discounts can save as much as 20% of your premium each year. You can guard your claim free years by choosing a higher deductible. A higher deductible will be higher than most minor claims so you won't be tempted to file.
