The most common Question:
How can I reduce my homeowner insurance premium?
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Answer: There are a number of ways to do this, but here are
some obvious methods:
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| 1. Install an Alarm System. Insurance companies often offer up to a 24% discount for installing a Central Station fire and burglar alarm system. Central Station means your home is monitored by a company such as ADT or Brinks and in the event of a fire or burglary, they notify the proper authorities. This may also apply if you live in an apartment, condo or coop and your building is alarmed…you should also receive a credit. |
| 2. Higher Deductibles equals Lower Premiums. Insurance companies reward us for taking a higher risk by increasing the deductible. In some cases the premium can be substantial. Check your policy or ask your agent. If you have had no claims in the past 10 years or so, a savings of $100 or more per year could really add up. |
| 3. Think before making a claim. In today’s homeowner insurance climate, sometimes having two or more claims in just three years could get you cancelled. Remember, the purpose of home insure is to restore your home to it’s condition prior to a fire, burglary or other catastrophe. It is not a maintenance policy. So, if your picket fence blows down in a storm perhaps it makes more sense to avoid making a claim than to risk using up your markers on something small. Remember, many companies offer a claim free discount. |
| 4. Non-Smokers. If no one in your household smokes, check your policy or you’re your agent as to the availability of a non-smoking household credit. |
| 5. Construction Type. Check your policy to make certain that your construction classification is correct. Brick versus frame for example. This also has an impact on your insurance premium. |
| 6. Multi-Policy discounts. Get Multi-Policy discounts when possible. Placing both your auto and home insurance with the same company can often bring a 5-10% discount on both policies. This again varies by company. |
| 7. Underinsured. Remember that as your home increases in value, you should also keep pace with the insurance coverage. Market value is not replacement cost. It is not what you can sell your home for, but what you can replace it for. This is very important. If for example you purchased your home 10 years ago and it cost $150,000 to build (excluding land), it may cost $240,000 to replace today. |
| 8. Insurance versus Mortgage Balance. Don’t get lured into this concept. The mortgage balance has nothing to do with the replacement cost of your home. Your mortgage balance continues to decline while in most cases the market value and the replacement cost of your home continues to rise. |
| 9. Flood Insurance. Flood insurance rates are standard, so you cannot shop for better rates. Increasing your deductible can decrease your rates, but you would have to take a $5,000 deductible to substantially reduce the rate. Raising your foundation or home out of the flood zone, or to a higher elevation is expensive, but it is becoming more common. If there is a dispute about your home in a flood zone, call your agent. If necessary, you can obtain an elevation certificate completed by a qualified engineer to support your position. |
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What is a deductible?
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It is a specific dollar amount that an individual must pay before reimbursement for expenses begins. The higher the deductible, the lower the cost of the health insurance plan.
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What is coinsurance?
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It is a feature found in most group health plans. It sets forth the percentage of covered expenses that you and the health insurance plan will pay. The most common coinsurance level is one in which you pay 20% and the insurer pays 80%. This is called 80% coinsurance.
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What is covered expense and are there limits?
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A covered expense is an eligible expense under the plan. It is an expense incurred by a covered individual that will be reimbursed in whole or in part under the insurance plan. Example: Under most plans, doctor’s visits are a covered expense, i.e., a doctor’s fee up to the amount provided by the plan will be reimbursed by the insurer. Just because an expense is covered does not mean that the coverage is unlimited. Most plans have limits on the expenses for which they will reimburse and most have some fore of deductible and coinsurance applicable.
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Do health insurance plans cover dental care?
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Traditionally dental coverage has not been included. Some plans do cover dental care particularly when dental work is necessary as the result of an accident. Some plans include limited coverage for hospital board and room as well when the procedure is conducted in a hospital.
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How is vision care covered?
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Most health insurance plans provide coverage for medical care related to eye injury or disease, but do not cover the costs of periodic eye exams or corrective lenses.
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Are all prescription drugs covered under health care plans?
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Generally, only prescription drugs that are for treatment of an illness or injury are covered, subject to applicable deductibles and coinsure. Many plans do not cover contraceptive prescription drugs, e.g., nicotine chewing gum prescribed for smokers who are trying to quit.
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Are there different types of drug plans?
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There are literally thousands of variations, but the principal types of prescription medication plans are open panel, closed panel, mail order and prescription drug card plans.
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