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  • How can I save money on homeowners insurance?
  • October 18, 2010
  • “We use our claims data to determine what territorial regions produce what volume of claims costs, ”said Leudke.

    Location does play a part in the process, however, when it comes to the proximity of your home to a fire hydrant in case of an emergency.

    “Fire district will be a cost determining factor,” said Sheppard. “If you live in a rural area, you might pay more.”

    Town class ratings range from 1-10; one being urbanites who live down the street from an accessible hydrant, and 10 might be small-town farmers who live out in the country. There isn’t much of a difference in cost between classes 3-7, according to Sheppard, but there is a huge difference between 1 and 9, due to the considerable expense of trucking water out to fight fires.

    Steven Gawlik, a Farmers Insurance agent in suburban Chicago, says that a popular misconception he sees is when people look to insure their home for the fair market value.

    “Homeowners insurance has to do with reconstruction cost or replacement value. It has nothing to do with real estate market value, which is a popular misconception,” said Gawlik.

    That is why full replacement value is the recommended starting point for an amount of coverage.

    “There is sometimes a significant difference between the two,” said Leuke. “Especially during times like these when the market value of homes has declined in recent years.”

    Besides improving your credit score, you can lower your home insurance premiums by keeping your house mechanically updated. If your credit score is already good, you can choose to pay a higher deductible in order to lower your monthly bill.

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  • Category: Featured Articles, Homeowners Insurance, Videos

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