Buying Home Insurance

The amount you are asked to pay when you ask for a quote for home insurance is determined by how big a risk the company think you are. In giving you a quote they take into account many things, such as how secure your property is, the area in which you live and the cost of the possessions that they would have to pay to replace if some mishap occurred. However there are ways in which you can help to lower the premium quoted with the biggest being shopping around either yourself or with a broker’s help, for a policy.

When looking for insurance make sure that you get at least four or five quotes from different companies as policies and premiums do vary from company to company. All policies are different and will have exclusions within them, so it is essential that you understand what you are and are not covered for.

Where you live will affect the price that you have to pay for your insurance, while you cannot change your address there are some things you can do to help lower the cost of your insurance. Installing more security is one of the best ways you can reduce the premium, insurance companies will list certain brands of alarms for instance which are considered the best and by having these you can cut the cost of your premium.

If you are thinking of making any big home improvements such as adding a conservatory then take this into account, the more value that you add onto the property then the higher the premium will be. Also take into account any patio furniture or garden equipment which is kept outside, some policies will include this in their policy while others insist that you take an addition to the policy in order to cover them.

If you have items in your home which are of particular value then make a note of these, any items which are classed as antique or say any collections such as records or art, might not be included in your policy unless you have particularly stated these at the out set of the policy.

Also check if computer equipment is covered in the policy, if you have more than one home computer then they might need adding to the policy as extras, some policies say that computer equipment such as printers and scanners are classed as commercial or business equipment and as such are not covered by the standard policy.

How To Pay Less On Home And Contents Insurance

Buildings Insurance went up again last year, costing homeowners another 1% a year, taking the average to just over £205 for a year's insurance. Contents insurance also went up, this time by 2% - now it costs the average homeowner £151 a year. However, some lenders are hiking prices even higher than that – Norwich Union for example, raised its prices by a whopping 6% last year.

The question is - why? There's so much competition out there, you'd expect prices to be falling, not increasing – but there are other forces at work, as we go on to discuss.

No 1 – the cost of having a house repaired or rebuilt

Labour and building materials are getting more costly, so when the insurance company calculates how much it would cost to rebuild your house, prices are higher. This is due to inflation, and the same thing affects the insurance company and its own operating costs. Wages, bills, office rental – all these costs are increasing year on year – so of course insurers have to factor these in.

No 2 – the weather

The British weather is getting more and more tempestuous, whether it's due to global warming we are not qualified to say, but it's a fact that we have been experiencing a lot of extreme weather in the past few years. The 1987 hurricane was a freak occurrence, but flash floods such as the incident in Boscastle, Cornwall, Helmsley in North Yorkshire, and Carlisle are making the headlines on a regular basis. The Association of British Insurers has stated that the average insurance claim due to flood damage could be anything from £15,000 to £30,000, making huge dents into the insurance industry's profits. In fact, floods cost insurance companies millions every year.

No 3 - Burglary

Claims due to burglary have been going up, now average at around £1,400. The 2 main causes are:

• From digital cameras to laptops, game consoles to ipods – our houses are full of electronic gadgets with a high value bought new, and a high value resold. Burglars are after these items and it's hitting the insurance industry where it hurts – their pocket.

• Burglars pick posh neighbourhoods to ensure they get away with the best items - with expensive items like jewellery for the taking, the value of these kind of claims is increasing.

Insurance companies use statistics relating to a postcode area to calculate premiums for everyone in that area. If your neighbours have suffered subsidence, or your area is near a river which has been known to flood – you will have to pay higher premiums. Similarly, if people in your area have been broken into, then it will be assumed that you are at a higher risk of making a burglary claim too.

Having a no-claims discount is a help when it comes to offsetting the annual rise in premiums, but insurance companies cap these discounts once you have 5 years no claims, so you will not get any further discounts.

So is there any way to avoid the rising cost of home and contents insurance?

The first thing you can do is look around for the best deal. Try the Internet for the best deals, because most insurance companies offer a discount, often 10%, for customers that buy online. You will also save if you pay by direct debit. It's tempting to accept your current insurer's renewal quote but don't be fooled – the small amount of effort it will take to shop around will pay good dividends. One of the reasons for this is because insurers always offer their best deals to new customers, existing customers are virtually penalised for showing loyalty!

Improving your home security is another good way to reduce premiums – while giving you essential peace of mind. Neighbourhood watch schemes, external security lighting, a burglar alarm, security locks on windows, and industry-recognised locks on external doors will make a difference. Obviously these things cost money to install, but they pay for themselves in the long run.

Insurance Can Help You Sell Your Home

Does your home insurance policy include things like plumbing or electricity failures? It most likely doesn’t.

What will you do if something goes wrong in the home after you’ve successfully closed the deal?

(there is a free ebook: 101 Tips For Selling Your House,for you to download, from a link at the bottom of this page).

Even worse, what if something goes wrong after the buyer has already moved in? You could end up paying thousands of dollars to have the problem fixed.

Don’t think that just because ownership of the property has transferred from you to buyer that the buyer won’t come to you if there is a major home failure.

Imagine if your brand new vehicle malfunctioned within days of its purchase.

Would you pay for repairs without word to the dealer? Of course, you wouldn’t.

Neither will your buyer if there is a problem with the home after closing.

As a for sale by owner home seller, you can benefit from the purchase of a seller’s home warranty.

Not only will it cover the cost of repair in the case that a major home item fails, it can also make your home look more attractive to buyers.

Prospective buyers will be pleased with the assurance that comes from a home warranty.

The last thing you want is to have to have the pressure of dealing with a surprising failure in the home after you have successfully closed the deal.

Deciding whether you or the buyer is responsible for paying for the damages could result in a heated debate.

Even in the unfortunate event of a home failure, you can avoid this type of situation by purchasing a seller’s home warranty.

Essentially, the home warranty picks up where insurance coverage leaves off by paying for failures in items like heating, plumbing, electricity, and air conditioning.

Be advised that the warranty only covers these items if they fail on their own.

Improper installation or maintenance, code violations, and unordinary wear and tear can lead to a denial of coverage.

Even without a home warranty, the buyer could not reasonably ask you to cover damages that were caused by actions taken on their part.

Depending on the provider, seller’s home warranty coverage can differ.

Make sure you carefully study and completely understand the policy you are purchasing before you pay for it.

In some cases, the home warranty might cover different items before and after the closing.

In most cases, the home warranty lasts for a year.

Buyers are given the option to renew the warranty coverage when it expires.

Be sure to advise your buyer that the cost to renew the policy might end up being more than the initial cost of the policy.

One of the good things about a seller’s home warranty is that it can be included as one of the closing costs.

Keep Your Home Insurance From Being a Waste of Time With a Current Home Inventory

You'll hear hundreds of people tell you that buying a home insurance policy for your home, wherever that home happens to be, is never a waste of time. Guess what? They're wrong. If you don't bother to keep a current home inventory you're wasting both your time and your insurance agent's and leaving the doors to your home wide open to whatever misfortune fate decides to throw your way.

All right, so maybe that's a little melodramatic. Chances are pretty good that you're not going to have a burglar come in and completely gut your home while you're on vacation. There's a relatively slim percentage of the population that ever has to sit and watch while their home goes up in flames. Keeping a current home inventory for your homeowners insurance provider helps protect you from this type of loss, so the odds are in your favor that taking the time to catalog everything you own is going to be a complete waste of time.

But are you willing to take that chance? Are you willing to leave yourself wide open to the possible repercussions of being a statistic, a victim, just because you didn't want to take the time to complete a current home inventory for your insurance provider?

How much money would you say you had invested in your home? No, not your mortgage payment. That should have been your starting number when you figured out how much home insurance you were going to need, not your final one. Statistics show that the average American has $5,000 to $10,000 dollars worth of "stuff" just lying around their house between their furniture, their electronics, their jewelry, their book, their clothing and their collectibles.

Unless you're not going to miss $5,000 to $10,000 dollars it pays to make sure you've got enough insurance to cover your losses. By cataloging what you own, how much it cost to buy it, where you bought it and when you bought it you know that every item in your house is accounted for and able to be replaced if something should happen. Many people find that the easiest way to create their home inventory for their homeowners insurance companies is to create a photo or video log of everything they own, carefully marked and stored in a safe place.

Pro Tip: Don't store your photo or video log in your house. If the structure goes up in flames you're going to lose that along with everything else.

Remember, it pays to update regularly and add big ticket items to your home insurance policy as you buy them. It's not going to do you any good to file a claim for a $7,000 television if your insurance company didn't know you owned it in the first place. By maintaining a current inventory you're protecting your possessions from loss if the worst really does happen and helping keep yourself free and clear of any accusations of insurance fraud when the time comes to file a home insurance claim.

Home Insurance And Selling Your Home

If you are selling your home, hopefully you have considered hiring a real estate agent to help you with all the fine details. If not – get to work!

The process of choosing the right real estate agent can be just as difficult as it is important. Below are guidelines to follow when you start your search for the right real estate agent for you.

Look at insurance companies that specialize in real estate. Usually these companies will be able to provide you with a list of their own real estate agents who are trained to the company’s specifications. Perhaps your current homeowner’s insurance company provides tools you need to sell your home; they may even have their own real estate agents from which you can choose. If not, they may be able to point you in the direction of a reputable insurance company or real estate agency that does.

Make sure the real estate agent you choose is trained or accredited. Most real estate agencies, or insurance companies that supply real estate agents, have specially trained their real estate agents, or have hired real estate agents who are in some way accredited. Look for special training or accreditation when choosing your real estate agent.

“Interview” the real estate agent. During the selling process, the real estate agent you eventually choose is going to handle a lot of things for you – many of which are better left handled by the real estate agent. However, there are certain factors you may want to know about, such as how the real estate agent plans to list your home and how the real estate agent plans to “show” your home. Make sure the real estate agent provides you with all the information you want to know.

In the end, choose a real estate agent you with whom you feel comfortable, whether the real estate agent is from an insurance company or real estate agency.