Don’t Lower Your Homeowners Insurance

Many home owners are contemplating reducing their homeowners insurance coverage since their property’s value has dropped. But experts warn that’s not a good idea and could leave home owners with insufficient coverage if a disaster ever strikes. “The market value of your home and its insurance value can vary widely because they are based on different assumptions and calculations,” according to an article in the Baltimore Sun. The insurance value is based on what it would cost to rebuild the house, not on what you paid for it. As such, even though housing prices have dropped in many markets, rebuilding costs have not. For home owners looking for savings, they might instead consider increasing their deductible. For example, increasing a deductible to $1,000 from $500 could lower the premium by 25 percent. Source: Baltimore Sun

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: