homeowners insurance help needed

[joesxm3]

First of all, thanks to everyone for giving me the motivation to get my affairs in order.

Today's item is homeowner's insurance.

I currently have $289,000 coverage $500 deductible through Cambridge Mutual for $1100 per year. I have auto with GEICO and called them thinking getting both together would be cheaper.

GEICO does not sell in CT but partners ith the Travelers and quoted me equivalent coverage for $850. I asked for the largest deductible ($5000) and they quoted $600.

If a $5000 deductible on health insurance makes sense, same goes for homeowner's right?

Is Travelers still a good company?

Are there other companies I should be looking into?

 

[OAG]

Not heard anything bad about Travelers. If you can afford the $5,000 deductible I would go with it. I look at home insurance as covering the catastrophe, not the little stuff which I would handle myself (broken window, fallen tree that does minor damage, etc.,). I carried a $8K deductible in Florida and the way I figured was if the house was wiped by a Hurricane I would probably move anyways (take the insurance payout and sell what was left) since I am sure my neighbors would have been wiped and the infrastructure would have been very badly impacted. Also remember do not insure LAND (when you say $289 does it include Land?). If you are insuring land you can safely reduce your coverage, and the premium, somewhat.

 

[joesxm3]

Not heard anything bad about Travelers. If you can afford the $5,000 deductible I would go with it. I look at home insurance as covering the catastrophe, not the little stuff which I would handle myself (broken window, fallen tree that does minor damage, etc.,). I carried a $8K deductible in Florida and the way I figured was if the house was wiped by a Hurricane I would probably move anyways (take the insurance payout and sell what was left) since I am sure my neighbors would have been wiped and the infrastructure would have been very badly impacted. Also remember do not insure LAND (when you say $289 does it include Land?). If you are insuring land you can safely reduce your coverage, and the premium, somewhat.

Good point about the land. I am not sure how my house value splits up, or even what the value is. zillow lists it as 281,000. previously it was more like 350,000. I guess things hsve dropped. good thing I don't count the house in my fire calculation as other than a place to live in.

I will have to do some research on value and replacement costs.

 

[OAG]

joesxm: I would only look to the County assessment of the tax value, as it is replacement cost that you want to insure - not some real estate agents or site as that will be their opinion of market value. Those numbers should be broken out for land and improvements on your latest property tax statement.

 

[MooreBonds]

I currently have $289,000 coverage $500 deductible through Cambridge Mutual for $1100 per year. I have auto with GEICO and called them thinking getting both together would be cheaper.

GEICO does not sell in CT but partners ith the Travelers and quoted me equivalent coverage for $850. I asked for the largest deductible ($5000) and they quoted $600.

If a $5000 deductible on health insurance makes sense, same goes for homeowner's right?

Are there other companies I should be looking into?

Regarding the $5k deductible, you simply have to crunch the numbers.

In your case, you can save about $250/year by taking on an additional $4,500 in deductibles. So, in other words, if you don't think you'll have a claim exceeding several thousand dollars over the course of the next ***18*** years, then you'll come out ahead by taking the higher deductible. (yes you could invest the $250/year in a fund, but I'm just using simple math here )

I don't know where you live, or what possible claims you might make, but you might want to take a careful, thoughtful look at what possible incidents might creep up, and ask yourself if you can make it for more than 18 years without having a large claim.

As for other companies, I don't have any direct experience with homeowners, but Allstate insures a large number of homes, and often gives auto/homeowners discounts if you have both policies with them.

I second the thought about the appraisal. Many insurers will try and make you think that you need coverage for the cost of your home, but your land will never lose value - so you don't need to insure the cost of the land and pay needless premiums! Just one thought on the other end of the spectrum: rebuilding costs have skyrocketed over the past 5 years, so you might want to make sure you have an approximate cost per square foot figured in to your policy such that you really could replace your house for that price.

One other tidbit: remember the difference between replacement value and the other phrase that refers to not depreciating it. One term will only replace the depreciated value of the belongings (i.e. didley squat), while the other will replace your belongings with new items.

 

[farmerEd]

Much better to keep a very high deductible and self-insure for the cheap stuff. You really *don't* want to be filing a claim for a $1000 one year, $1200 the next, $700 next year etc...sooner or later the company is going to see they are loosing money on you and jack up your rates, or cancel your policy altogether. I've seen it happen to people I know. Best you want with home insurance is pay a low premium every year, and never use it, but know it will be there when the big one hits.

Also watch your credit score. Higher your score, the lower your rates - at least with the companies I have dealt with.

 

[Danny]

farmerEd is right, Have a high deduct and don't file. Use it only for catastrophe. Just learned from my American Family agent that they have started rating me based on my credit rating, my rates just went down 20%! and as an aside about car insurance with kids at college....I was paying hefty rates for the kids even though they were away most of the year...just took me bringing it up with the agent during our yearly chat - said he would take them off the rating for 9 months of the year put them on for the summer, they are still covered when they come home for holidays, etc, because they are in the household and are automatically covered - just not rated. The rate for the summer is like $100 for 3 months instead of $1000+ for the whole year! I love my AF agent! There are plenty of opportunities out there to be frugal.