Real Estate Term of the Day: Hazard Insurance & Homeowners’ (Insurance) Policy
HAZARD INSURANCE – a form of insurance that protects against certain risks, such as from fires or storms (Barron’s Dictionary of Real Estate Terms)
HOMEOWNERS’ (INSURANCE) POLICY – an insurance policy designed especially for homeowners. Usually protects the owner from losses caused by most common disasters, theft and liability. Coverage and costs vary widely (Barron’s Dictionary of Real Estate Terms)
Here are several ways to save money on property hazard insurance
- Make Your Home’s Exterior Fire Safe – A large portion of your homeowner’s insurance premium is based on how fire safe your home is. Simply by cutting back weeds and brush 10 feet from your home and any other structures on your property.
- Add Motion-Sensitive Lighting – Adding motion-sensitive lighting around your home discourages burglars, and since burglaries are one of the largest expenses for home insurance policies, preventing burglaries can lower your monthly premium.
- Dead-Bolt Every Exterior Door – Placing a dead-bolt lock on all exterior doors reduces burglaries and at the same time reduces your monthly homeowner’s insurance premium.
- Window Locks – All windows, regardless of which floor they are on or how difficult you think it would be for a burglar to reach them, need to have a working lock. Again, preventing burglaries will reduce your homeowner’s insurance premium.
- 24-Hour Fire And Burglary Monitoring – A home security system that’s monitored 24/7 for fire and burglary can reduce your homeowner’s insurance by up to 30%—plus give you a great deal of peace of mind.
- Smoke And Fire Detectors – Having the proper number of fire and smoke detectors installed for the size and configuration of your home can help reduce the cost of your homeowner’s insurance. Remember to change the batteries at least twice each year – each time you set your clock forward or backward an hour.
- Kitchen Fire Extinguisher – At the very least you need to have a fire extinguisher easily accessible in your kitchen. The extinguisher needs to be of the proper type and size for your kitchen.
- Make Your Home More Disaster Proof – Fire and burglary aren’t the only things that affect the price you pay for your homeowner’s insurance. Adding storm shutters for wind protection, adding a heavier roofing material, or retrofitting for earthquake protection can all reduce your monthly premium. Check with your agent for the savings you would realize and then determine its cost-effectiveness over time.
- Ask Questions First – Did you know that buying a home near a fire hydrant can save you money each month on your homeowner’s policy? Did you know that buying in a town with a full-time fire department can save you money over buying in a town with a volunteer fire department? Before you buy a home ask for a CLUE (Comprehensive Loss Underwriting Exchange) report; it should alert you to possible insurance problems.
- Institute a Neighborhood Watch – Neighborhoods with a Neighborhood Watch Program often qualify for lower homeowner’s insurance costs. If your neighborhood doesn’t already have a Neighborhood Watch, see about instigating one yourself.
- Tell Your Insurance Agent About Home Improvements – Many times homeowners make improvements to their property, sometimes not even thinking in terms of reducing their homeowner’s insurance, and they fail to mention these improvements to their insurance agent. Talk to your insurance agent any time you make a repair or improvement to your property – many improvements can reduce your homeowner’s insurance even when that wasn’t your intent.
- Detached Garage – Typically garages contain oils and flammable liquids such as gasoline; this makes garages a bad risk for fires. Therefore, if you have a detached garage your homeowner’s insurance can be slightly less – if you have a detached garage make certain that you tell your agent.
- Beef Up Your Roof – Adding heavier shingles or taking other measures to strengthen or improve the quality of your roof can significantly reduce the cost of your homeowner’s insurance, especially if you life in areas prone to high winds or other weather phenomenon that can damage a roof.
- Update Your Plumbing and Appliance Connections – The most common claim against a homeowner’s policy is not actually fire or burglary – it’s water damage. Upgrading water lines and water hook-ups to appliances can greatly reduce your chances of a water rupture and can save you money month after month – be sure to let your agent know of any upgrades you perform.
- Make Repairs Around the Property – Loose decking or railings, cracked or uneven walkways…anything that can cause a liability issue will increase your homeowner insurance premiums. Making repairs around the home to make the home and your property safer can help to keep your insurance premiums in line.
- Fire Escapes – Check with your insurance agent but many companies offer a discount on your homeowner’s policy if you have taken steps to provide for fire escapes, especially from upper stories. Simple rope ladders attached to upper story windows may qualify you for a small discount.