Most people don’t get too excited when it comes to homeowners insurance. It’s just one of those bills that we’re not thrilled about paying, but we keep the premium going because we need to. However, if a tree branch smashes through the roof, or unexpected flooding takes place, homeowners insurance suddenly becomes one of the most necessary things in our lives.

Ultimately, homeowners insurance is a tool, and a tool is only as effective as its user. While you probably won’t experience a catastrophe that warrants the use of your insurance, it’s best to be smart and buy what you need. Read on for a few tips to help you shop smart, and give you the security you and your family need.

  • First, how much insurance do you really need? To buy properly, you need to know the value of your home. We’re not talking about an educated guess or a ballpark figure, but the precise value. In the event that part or all of your home is damaged or destroyed, you need to know what it will cost to repair or replace. For most people, their home is their largest asset. A smart move is to hire either an assessment company or a home builder to figure the value.
  • Understand that the cost of your premium is based upon risk. It’s the risk your insurance company is taking by selling you the policy. Simply put, the greater the odds that something will happen that forces them to pay you for damages, the higher the premium costs will be. Some of the risk factors that come into play are things like the condition of your neighborhood, how close to busy areas like highways you are, and if large trees are nearby. Every risk factor you can think of will be assessed, and the end result will be the price of the premium.
  • However, while you can’t do anything about things like your proximity to a highway, there are a lot of things you can do to reduce the cost of your premiums. For example, a home security system, walkways and steps that are well-cared for, and wiring and electrical systems that are updated and up to code will all make a difference. Basically, if a feature makes your home safer in some way, you’ll probably be able to use it for a discount.
  • Bear in mind that your homeowners insurance doesn’t just cover the structure of our house itself, it also covers all of the stuff that’s inside. So how much is your stuff really worth? As far as personal possessions go, you probably have at least $20,000 worth of items in our home. Take the time to make a list of all your belongings, as well as the value of them based on receipts. It’s also a smart move to photograph the things in every room and hang onto receipts for new purchases. That way, if disaster happens to strike, nothing will be forgotten about or undervalued due to a lack of proof.