3 Times When Cheap Homeowners Insurance Is Worth It… and 1 Time It’s Not.

Insurance is a necessary part of owning a home. As is the case with any insurance policy, coverage and premiums vary. Lenders frequently decide how much coverage a homeowner needs. The policy should cover the full mortgage, as well as personal property; in some cases, natural disasters are enveloped in as well.
Not all homeowners are as informed. As the Wall Street Journal pointed out in 2014, 38 percent have not done enough research, while an additional 40 percent aren’t fully familiar with their coverage or discounts available. It’s advised to shop around for a sufficient policy – or to have an independent agent do the legwork – but as you search, you’ll inevitably come across lower prices.
The amount may seem tempting, but is the policy worth it? Here are some instances when it is – and others when it’s not.
When You’re Getting a Value
Discounts
The basic rule of homeowners insurance is, the stronger your coverage, the fewer out-of-pocket expenses you will have to pay in the event of a disaster. Yet, as not all homeowners are aware, certain discounts lower your premiums without compromising your coverage.
Depending upon the carrier, several factors could result in such a deal:

• A bundle policy – combining homeowners with life or auto insurance.
• Safety features, such as smoke detectors, deadbolt locks, gas leak detection, and security or alarm systems.
• Updating your property.
• Certain professions, including nursing, teaching, and engineering.
• Where you attended college.
• Where you are employed.
• Any professional organization affiliations.
• If you practice disaster preparedness.
• If your area has a professional fire department.
• If your home has electrical and heating systems less than 10 years old.
• The material your home is made out of.

Discounts in some of the above instances may cut premiums as much as 20 percent.
The Policy Covers Exactly What You Need – And Nothing More or Less
Any policy should protect you against risks you can’t afford to cover yourself, should include home improvements, and should assist with rebuilding expenses. Beyond these basics, certain areas may require hazard coverage – for earthquakes, floods, and other natural disasters. If you’re not in one of these zones, hazard coverage may unnecessarily push up your premiums.
Experts advise that, to make sure a homeowner is still getting a deal, the policy should be reviewed once a year.
If You’ve Been a Loyal Customer
Not an instant deal, loyalty discounts may kick in when you have been with a carrier for five to 10 years. Like other discounts listed above, these lower premiums do not compromise your coverage and, instead, reward consistent customers who have good credit and a clean history.
When You’re Not Getting a Value
If You End Up With High Out-of-Pocket Expenses
Homeowners shopping around may be told to opt for a higher deductible, as the monthly premiums end up being smaller. This may be good advice – but only up to a point. The right balance in this instance is selecting a higher deductible but having enough in your budget to cover out-of-pocket expenses in the event of a disaster.
This situation proves to be a bust when a disaster does occur, your policy provides minimal coverage, and the costs for repairs and recovery end up far beyond your budget and savings.
Make an informed decision about your policy as you insure your home. Work with Ion Insurance to evaluate all options, to get a quote, and to take out a new policy. Contact any of our locations for more information.