| What do you like the most about your home - | | | | and how much I could probably sell it for, |
| the bright, sun-filled kitchen, the shiny | | | | but I don't have a clue how much it would |
| wood floors or the comfortable bedrooms? | | | | cost to rebuild if it burned down. |
| | | | |
| Or is it the fact that your home probably | | | | The state Department of Banking and Insurance |
| makes up maybe the biggest part - of your | | | | and the Insurance Council of New Jersey |
| total net worth? | | | | recommend that homeowners in this situation |
| | | | should consult their insurer, who will be |
| Either way, you have to protect what you | | | | able to estimate the cost of rebuilding based |
| have, using homeowner's insurance. | | | | on the size and location of the home. |
| | | | |
| Although there were reports a few years ago | | | | Think twice before calling your insurance |
| of higher prices and limited availability for | | | | company with small claims for minor home |
| homeowners insurance, the market has opened | | | | damage. There have been reports of homeowners |
| up again, according to J. Robert Hunter, | | | | facing much higher premiums after putting in |
| insurance director for the Consumer | | | | only two claims. So if it's a loss you can |
| Federation of America. Premiums are expected | | | | handle, take care of it yourself. |
| to rise by no more than the inflation rate | | | | |
| this year, he said. | | | | And, in that vein, consider a higher |
| | | | deductible. |
| "The market remains a competitive one where | | | | |
| homeowners' insurance shoppers can be | | | | "If you're not going to file a small claim, |
| selective," said Marshall McKnight, a | | | | it's no use paying a premium to be covered |
| spokesman for the state Department of Banking | | | | for an amount you wouldn't file for," Hunter |
| and Insurance. | | | | said. |
| | | | |
| Here are several ways to save on home | | | | "Every dollar you give to an insurance |
| insurance: | | | | company, on average you only get back 60 |
| | | | cents," Hunter said. The rest goes to the |
| Shop around. While many homeowners believe | | | | insurance company's profit and overhead. So |
| that all insurance companies charge the same, | | | | if you can self-insure for smaller losses, |
| that's an expensive mistake. Use a service | | | | you should. |
| such as ours to compare rate quotes from | | | | |
| different companies if YOUR area. To get | | | | About 20 years ago, Hunter raised |the |
| started, just use the form on the right. | | | | deductibles on both his car and |home |
| | | | policies, and banked the money he saved on |
| "You can go from one company to another and | | | | premiums in a special account. Over the |
| pay twice as much," said Hunter. | | | | years, he used that account to pay for about |
| | | | $2,000 to $3,000 in losses, mostly |
| And don't just call an agent and expect him | | | | auto-related. He still has $4,000 - money |
| to do the shopping for you, Hunter advised, | | | | that the insurance company |could have had. |
| because agents don't represent all companies | | | | |
| and might not get you the best deal. | | | | "Nowadays, most insurance companies recommend |
| | | | a deductible of at least $500. If you can |
| Insure for "replacement cost" rather than | | | | afford to raise your deductible to $1,000, |
| "actual cash value." After all, if your | | | | you may save as much as 25 percent," |
| belongings are destroyed, do you want the | | | | according to the Insurance Information |
| insurance company to send you enough to buy a | | | | Institute, an industry group. |
| new couch - or do you want a $50 check for | | | | |
| the actual value of your 11-year-old couch? | | | | Make sure your home insurance policy includes |
| | | | enough liability insurance, in case someone |
| Make sure you are covered for at least 80 | | | | is injured on your property. |
| percent of the cost of replacing your home. | | | | |
| If you're not, it could hurt you even if your | | | | Consider buying your home and auto insurance |
| home does not need to be completely replaced. | | | | policies from the same insurer. Some |
| | | | companies will take 5 to 15 percent off your |
| Let's say your home would cost $200,000 to | | | | premium if you buy two or more policies from |
| replace and you're insured for only $100,000, | | | | them. |
| half of the replacement cost. If you have a | | | | |
| $10,000 loss, you would get only half of that | | | | You can get discounts if you install smoke |
| amount, or $5,000. | | | | detectors, deadbolt locks or burglar alarms. |
| | | | |
| Of course, knowing how much it would cost to | | | | Keep your credit history clean. Insurance |
| replace your home is not always easy. For | | | | companies are increasingly checking credit |
| example, I know how much I paid for my home, | | | | reports to set their rates. |