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5 Hacks to Slash Your Homeowners Insurance Rates

5 Hacks to Slash Your Homeowners Insurance Rates

There are so many additional expenses to owning a home which we never think about until we have one, and homeowners’ insurance is just another one of those payments. The average American pays nearly $1,000 annually on homeowners’ insurance, and home owners in more disaster-prone states such as Florida and Texas can see their costs spike up to $2,000 while states like Idaho and Utah average around $500.

But you do not have to head to the Rockies in order to slash your homeowners’ insurance. A few small steps and due diligence can trim your rates.

  1. Check your coverage

Once you get used to making insurance payments, you may just start sending your check automatically without thinking about what you are paying for. But while under-insuring your home can be catastrophic if disaster hits, over-insuring your home is an easy way to waste money.

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Take the time to go over your policy and see if you are being covered for something you do not have to worry about. For example, cancel earthquake coverage if you live in Boston. One key point which homeowners should check for is to see if your insurance policy covers the loss of any electronics or jewelry which you no longer own or if its value has decreased. If it does, then cancel those policies and pocket the reduced cost.

  1. Bolster your home’s security

A secure home means lesser burglaries aid fires, which means that your home is less of an insurance risk. Most insurance companies will offer a discount if you take measures to protect your home such as smoke detectors, deadbolts, a burglar alarm, or even a sprinkler system. One of the basic security measures you can take to bring down your insurance is to make sure you have good locks on all your doors.

However, a lot of these measures are expensive and can end up costing you more money than you might save with a discounted insurance policy. Before taking the time and money to add new features, talk with your insurance company about what you can do to improve your home and what discounts they will offer.

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  1. Combine your different insurances

Improving your home security is not the only way to get a discount. Many homeowner insurance companies also offer automobile or life insurance. These companies will often offer a small discount if you choose to purchase multiple policies from just them. For example, Allstate proclaims that “you can save up to 25% off your auto premiums and up to 35% off your home premiums” if you purchase both insurances from them, and most major insurance providers advertise similar discounts.

Just like bolstering your home’s security, you should check with the insurance companies to see exactly how much you can save in your situation and whether it is actually cheaper than sticking with your original plan. But this discount compared with the aforementioned security discount could save you quite a bit.

  1. Raise your deductible

The deductible is how much you are liable for in the event of damages. If you suffer damages that are less than your deductible, then you will have to pay for it out of your own pocket.

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Insurance companies obviously do not like to pay for your damages and will offer you a lower rate if you choose to raise your deductibles. This can be a challenging decision and requires you to decide whether the increased risk of a higher deductible is worth the lower rates.

But you do not have to raise your deductible to something catastrophic. Raising the deductible to $1,000 compared to the normal accepted sum of $500 will provide enough of a discount that it will be normally worthwhile. If you have the money saved up for the occasional emergency and take steps to keep your home safe, then it can be worthwhile to go for the higher deductible.

  1. Be careful about small claims

If an insurance company thinks you are more of a risk, they will charge you more. And one of the key ways in which they determine who is a risk is by the amount of claims you file. Even small claims such as a broken window can make insurers more wary about you and end up increasing your premiums.

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Remember that insurance exists to cover catastrophic losses. If you have a smaller loss which you can afford to pay back without too much difficulty, it may be for the best for you to bite the bullet and eat the cost without filing a claim. While you may not like your insurance company, you do want to keep them on your good side so that your rates stay low. Filing a bunch of small claims that do not even exceed your deductible will not keep them happy.

Featured photo credit: State Farm via flickr.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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