When our mortgage nearly doubled due to the cost of our wind and hail insurance policy, I freaked out a bit. How was it possible that insurance could be so high?
When my heart started beating normally again, I called our insurance agent. My instructions to her were this:
Give me the lowest rate possible.
She went to work on it and called me a couple of days later with a quote that was 68% lower than what the mortgage company was charging us. As a matter of fact, when the new insurance rate was factored into our mortgage, our mortgage actually dropped an additional $20 lower than it was before the increase. Many people have asked how that was possible. All I can say is that there was a LOT of praying and trusting going on in this house.
How did we lower our insurance rate?
When I told our agent to get us the lowest possible rate, she did all of the work but this is how she did it.
- She contacted our mortgage company to see exactly what was required. By doing this, she was able to adjust the value of our home slightly lower which decreased the cost of the insurance.
- She raised the deductible to the highest available.
- She priced the policy for structure only. Nothing inside the home is included in the wind and hail policy. Nothing outside the home is covered. Just the house.
While we were able to get a rock-bottom price on the insurance, there could be repercussions. If a hurricane blows the roof off our home and everything inside is wasted, none of it is covered. Nothing will be replaced. And, we will need to come up with a significant deductible. So, it is a risk, but these changes kept us from avoiding foreclosure.
My advice to you is this: Consider what you need in a policy. Don’t accept what the mortgage company gives you. Shop around.
What are your tips for saving on home owners insurance?
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I agree. As long as you are aware of what your policy covers and are willing to accept that risk then you can be alright with a lower policy. I work as an insurance agent and although I understand how tight a budget can be I hate to make a policy skimpy. I would always hate for something to happen and have to explain that everything is gone. Make sure when you are able to adjust them back to where they need to be.
yeah and as time goes on and u can fish some $ money from here or there u can adjust ur coverage to cover more when and if u have the $ to do so. Mine went down a bit because the value of my home did..yeahh economy :O( …but i do this with my auto insurance EVERY time we move (military family) because it changes state to state anyway…but most folks don’t think to check on these rates from time to time..if u have an extra 5 dollars a month it can change ur coverage dramatically w auto….or if u need more $ raise u r deductible and pay less monthly….. it does not hurt to check on these things each time ur policy renews…
Great idea, Mackenzie. Of course, we are hoping to sell and move north of the interstate where the rates are lower. Hoping… wishing… praying… 😉