With rising home prices, homeowners should examine their insurance bills
October 9, 2014
The median price of U.S. homes reached $195,000 thanks to a 3 percent increase in price from July to August. On a year-over-year basis, home prices improved 15 percent in August, reaching their best level since 2008, according to RealtyTrac.
“We continue to see the traditional housing cycle this year with most of the price appreciation happening in the spring and early summer months,” Chris Pollinger, senior vice president of sales at First Team Real Estate, told HousingWire.
It's a good idea to consider the dwelling amount offered by your insurance provider - especially if construction costs are rising.
As home prices continue to climb, CBS MoneyWatch reported now might be a good time for homeowners to consider checking out their insurance policies to find out their amount of dwelling coverage, which should be large enough to cover the cost of rebuilding a home—not the rough sales estimate of the home.
Homeowners living in areas with skyrocketing rebuilding costs might be underinsured. Families that have recently completed renovation projects or home additions might also want to check with their insurance providers.
Michael Barry, a spokesman the Insurance Information Institute, told Bankrate the two biggest factors in determining the cost of a home insurance policy comes from dwelling coverage and the number of personal possessions in a home.
“The policy is really driven off of the dwelling protection number,” Barry said. “That number is what I'm going to need in the event I have a total loss and I need to rebuild my current home in its current location with comparable construction materials.”
Save on your home insurance policy
?Families looking to save money on their insurance policies should consider increasing their deductibles to $1,000, according to MoneyWatch. Homeowners who increase their deductibles can save up to 20 percent on a range of home insurance policies.
Some insurance providers even allow homeowners to raise their deductibles to as high as $25,000, which provides massive savings on a monthly premium.
Homeowners looking for a better insurance provider altogether should consider the options offered by SelectQuote Auto & Home. SelectQuote offers comparison shopping from a dozen of the nation's blue-chip insurers, giving its customers a slew of options and plans to choose from.
Other money-saving advice
Many homeowners are also saving money on monthly home insurance premiums by installing a burglar alarm or dead-bolt locks. MoneyWatch reported some companies offer discounts of 15 to 20 percent for such safety features.