A. Your Financial Research & Information

$TEPS TO REDUCE YOUR INSURANCE COSTS!
___by Robert T. Lord

Owning your home is the American dream; however, there are costs beyond your monthly mortgage payment which can impact your budget: taxes, utilities, maintenance and homeowner's insurance.

The variance of annual premium costs for insurance coverage can differ greatly. Insurers are increasingly reviewing credit scores, and not only when you initially take out a policy, but randomly throughout the life of that policy. The result? Lower credit scores, a higher rate increase upon renewal.

Another factor is your claims history. DO NOT arbitrarily file claims; when you really need your coverage to work for you, that final requisite claim may put you "over the edge" and you may risk cancellation.

According to Insurance Commission statistics, the average annual homeowners' insurance premium is approximately $567.00; Texans pay the highest national average @ $861.00 per year, with Wisconsin having the lowest rates, averaging $266.00 annually.

Here's some approaches which may significantly slash that premium:

• DO consider your insurance policies being with one company. By giving them all your business, you may qualify for a 10% discount (called a "multiline" discount or a "bundled" policy).
  
  
• DO stay long enough with your insurance company to get some "perks". The greater the longevity with them, the more receptive you'll find them to extend discounts; of course, this is contingent upon a good payment history and your proving yourself a low-risk customer. The premium discounts can be as much as 5% after your 3 - 5 year anniversary as their insured, with up to 10% after being with them for over 5 years! Requesting quotes periodically may serve to result in receiving a discount in order to keep your business.
  
  
• DO shop around. The insurance industry is highly competitive. You have 2 courses of action in comparing insurance premiums: either with an insurance company that is public-direct, or an agent/broker who represents multiple carriers. You can also contact the Tennessee, Mississippi and Arkansas State Insurance Departments for referral names and phone numbers.
  

Tennessee Consumer Insurance Services Mississippi Consumer Helpline Arkansas Insurance Department

1-800-342-4029 1-800-562-2957 1-800-282-9134

• DO consider increasing your insurance deductible. In doing so, you may experience a 25% or more reduction in your annual premium. The more risk you assume, the lower the cost of your homeowners' insurance. You should carefully determine if you require a low deductible. Get various quotations/estimates to compare the savings on a higher deductible. Take a look at the following statistics monitored by the Insurance industry; however, budget carefully and consider your unique needs:

Annual Savings by Increasing Your Deductible:
(these percentages are estimates only)

Save as much as 12% with a $500.00 deductible; Save as much as 24% with a $1,000 deductible; Save as much as 30% with a $2,500 deductible; Save as much as 37% with a $5,000 deductible.

• DO concentrate on home safety and security to achieve discounts on your homeowners' policy. Premium home security systems, burglar alarms, smoke detectors, and even dead bolt locks enable discounted premiums. The range is 5% to 20% for these and similar items. If you protect the dwelling your insurance company is insuring, they'll reward you for doing it!
  
  
• DO your roof replacement, electrical system & window installation, plumbing & heating and cooling upgrades…AND MAKE SURE TO TELL YOUR INSURANCE COMPANY ABOUT IT to get the benefit of a lowered premium.
  
  
• DO spend your money for insurance for your property, NOT on the land under it, unless you reside in a flood plain area, then most certainly carry flood insurance. Theft, fire, and weather (acts of God) affect your home and contents…not your land.
  
  
• DO keep abreast of the financial health of the company with whom you decide to do business. Should you have a claim and suffer a loss, you want to receive prompt and courteous service…and get paid for the claim. Standard & Poors' research documents relative reliability factors, as does The National Association of Insurance Commissioners.
  
  
• DO request a "guaranteed replacement clause" and "earthquake coverage" in case you need to rebuild. It is relatively inexpensive and the value received through having peace of mind is well worth it!
  
  
• DO remember this: Statistics indicate that, on an annual basis, 23,000+ residential fires are started by cigarettes, cigars, or other smoking materials Discounts are readily available for non-smokers.
  
  
• DO inquire about a Senior Discount! If you're 55+ and retired, you may qualify for a 10% discount. Insurance underwriters have determined that since you're home, you're available to supervise any malady which should occur on your property…and you've got more time to implement regular repairs.

Pay Yourself by Restructuring Your Mortgage!

Here's 3 ways Why to build a bit of Wealth…Wisely:

• Retire high-interest debt by restructuring your debt; then concentrate on increasing your equity base to create a restraint against inflation as you watch your cash-convertible nest egg grow.
  
  
• When your property's market value is 20%+ above your mortgage balance, eliminate your P.M.I.
  
  
• Refinance that Jumbo loan to a lower rate, and slash a few more years off at the same time.
  

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