Aging homes tend to experience more problems and trigger more insurance claims than newer homes. The problems mean insurance for older homes costs more than insurance for newer homes. Use the following tips to enjoy affordable insurance for your aging home.
Choose the Right Policy
Several home insurance policies are available for your older home, depending on the insurance companies you wish to deal with. The available options include:
- An HO8 policy that covers named perils and usually excludes things like water damage
- An HO3 policy is an open peril policy and offers broader coverage than an HO8 policy
- A guaranteed replacement cost coverage that extends your coverage beyond the policy limit and promises to replace your home irrespective of the cost in case of damage
The policies' respective rates vary; for example, guaranteed replacement cost coverage typically costs more than the actual cash value policy.
Confirm the Replacement Value
Your home's replacement cost does not always reflect its market value. In addition, building and construction costs fluctuate over the years. Therefore, you should not assume that your home's replacement has stayed the same over the years. Always recalculate the replacement cost, which determines coverage rates, to ensure you don't overpay your insurance.
Maintain the Home
Older homes tend to experience more frequent breakdowns than newer homes. Inspect and maintain your home regularly to prevent such breakdowns. For example, an aging roof can resist storm damage if you maintain the gutters, keep the roof clean, and replace missing roof parts as soon as they occur. Fewer damages will lead to fewer claims and lower rates.
Limit Your Claims
Numerous claims in your insurance history lead to high insurance rates, and the reverse is true. A good way to minimize claims is to prevent damages from occurring in the first place. Another way is not to file an insurance claim every time damage occurs.
Fix minor damages without the insurance company's involvement and only file claims for major damages. That way, you reduce the overall number of claims and limit out-of-pocket repair expenses.
Hunt for Discounts
Many homeowners can benefit from home insurance discounts. The benefits are even better for homeowners with older homes who would otherwise require significant investment for their home's coverage. Here are examples of discounts you may include:
- Bundling discounts if you buy multiple policies from the same company
- Security measures if you install proven security detergents, such as burglar alarms
- Claims-free discounts if you don't file a claim for a specified duration
- Home improvement discounts for renovations on your older home
Ask your home insurance agent to help you hunt for all the discounts possible.