Host of Factors Can Help Reduce Insurance Costs

For homeowners, the cost of home ownership can feel overwhelming at times. That's particularly the case for first-time homeowners, who often find the initial few months of home ownership to be financially stressful.

Coming to grips with all the costs of home ownership might be difficult, but it's something all successful homeowners eventually do. Still, there are things prospective homeowners can do to prepare themselves for that initial sticker shock, and even make the cost of home ownership less than it might otherwise be.

Perhaps one of the best ways to lower that cost is to reduce insurance costs. Many prospective home buyers might be surprised to learn that home insurance costs often depend on the individual, and aren't set in stone based on the property value, geography or many other factors beyond the control of the homeowner. For those thinking of buying a home, the following tips might help reduce the cost of home insurance, helping make for a smoother transition to home ownership in the process.

* Maintain a strong credit rating. Whether applying for homeowners insurance, automobile insurance or renter's insurance, applicants should know the role of their personal history in determining their insurance premiums. Insurance companies look at applicants as risk, with some proving more risky to insure than others. Those considered less risky are often those who have avoided financial pitfalls in the past and proved capable of maintaing a strong credit rating.

There are a host of ways to maintain a strong credit rating, from paying bills on time to never missing payments to exhibiting an ability to consistently pay bills, be it a phone bill, car note or energy bill. Any prior declarations of bankruptcies will likely raise a red flag with prospective insurers.

* Shop around. Before buying a home, prospective home buyers can shop around for the best rates. Part of doing that is determining the deductible. The lower the deductible the higher the monthly payment will be. However, by raising the deductible, which will incur higher initial out of pocket costs in the case of an accident, homeowners can lower their monthly payments by as much as 20 percent, and possibly even more. When shopping for coverage, inquire as to the potential savings of a higher deductible. Oftentimes, it can lead to substantial monthly savings. As homeowners grow more comfortable and financially stable, it's easy to simply lower the deductible if need be.

* Consider geography. While many home buyers might have an ideal ZIP code or locale (i.e., oceanfront) in mind when shopping for a home, it's important to consider the insurance risks of certain regions. Coastal areas are routinely listed as the most costly places to own a home, as insurers are wary of insuring homes in areas that might be open to routine damage, be it from floods or other harsh weather associated with oceans, such as hurricanes.

When shopping for a home, the geography might be ideal, but the additional costs might make it difficult to enjoy the home. Prospective buyers with their eyes on an oceanfront home might want to consider something further inland, where they can save money on the price of the home and reduce their insurance costs as well.

Home Do It Yourself Exterior & Interior Money & Finance Safety Site Map Advertisers