Neighborhood Housing Services of New Haven has developed five tips to help you choose and manage your insurance needs, whether you’re a renter or homeowner:
1. Don’t let a homeowners policy “gather dust.”
Most people obtain homeowners insurance when they buy their home, then put the policy into a drawer and forget about it. However, it’s best to review your policy every year and see if it needs to be upgraded. For example, if you’re doing a major remodeling project, such as finishing a basement, updating a kitchen or renovating a bathroom, the value of your home and property will change and thus your policy needs to be re-examined.
Choose a homeowners policy that covers 100% of the replacement cost, not only market value. Unfortunately, in some areas, older homes have a market value that is substantially below the replacement cost. Don’t be caught with an inadequate policy.
Building contractors or professional replacement-cost appraisers are a good source for obtaining an estimate for your home. Estimates from these sources should reflect your home's new features, like those mentioned above. NHS of New Haven can put you in contact with qualified professionals.
2. Buy and update renters insurance.
Renters insurance protects the valuables inside your home whether you're living in an apartment or renting a house. If an incident such as a fire or flooding, a landlord's insurance will cover the building itself but not your own property. As with homeowners insurance, you should review the policy regularly to assure it reflects your current address and property. For example, if you do not alert your insurance company when you purchase an expensive item such as a tablet computer or piece of art, you might not be reimbursed if it is stolen later.
3. Manage your credit for the lowest insurance premium.
Just about everyone has heard about credit scores. However, many people aren’t aware that insurance companies calculate a person’s insurance score, and use that number to determine how much your annual homeowners insurance will cost.
Like a credit score, an insurance score takes into account your outstanding debt, the length of your credit history, whether you pay your bills on a timely basis, your number of credit accounts and any new applications for credit. The best insurance scores are assigned to individuals with long, established credit histories, a track record of on-time bill payments, low debt and few new credit accounts. NHS of New Haven offers post-purchase housing counseling and financial capability programs that help you manage and improve your credit score.
4. Look for ways to lower auto insurance costs.
There are more than 250 million registered automobiles and light trucks in the United States, and the average vehicle age is more than 10 years. If you’re one of the millions of drivers with a car, there are ways to lower your insurance cost.
Most auto insurance companies offer reduced rates to drivers with clean records. If you haven’t had an accident in the last few years, check with your insurer and others and determine if your rate could be lowered.
Parents of children who drive know that adding their kids to the policy could push up the annual premium. But if your child successfully completed some driver-education courses, or earns good grades in school, alerting your insurance company could lower your auto insurance costs.
5. Purchase life insurance.
Life insurance is a tough investment for many people, but if your income is essential to your family’s day-to-day life, then planning for the ultimate unexpected occurrence could be the right thing to do. Life insurance products are incredibly complicated, and according to an industry trade group, more than 100 million people in the United States are without life insurance protection.
Working with a financial coach at NHS of New Haven can help you set a budget that will help you manage all of your insurance needs.
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