Should I choose a lower premium or better coverage?
I just purchased a house, and finding the right insurance has been challenging due to the home’s age and other factors. I currently have two quotes: one for $2016 a year that doesn’t cover overland flooding (which is common in our area), and another for about $3200 annually that includes overland flood coverage. I could lower the second premium to $2600 by increasing my deductible from $2500 to $5000, but that deductible feels quite steep.
I’m feeling overwhelmed by the decision. This property—perhaps a questionable investment—is significant, and while the premium is important, I’m also concerned about facing a hefty bill due to potential overland flooding. Any advice?
It’s a tough decision, and it’s completely understandable to feel overwhelmed given the circumstances. Here are some perspectives that might help you weigh your options:
Evaluate Risk vs. Premium: Consider the likelihood of overland flooding in your area. If it’s a common occurrence, paying for the flood coverage might be worth it, even at a higher premium. Research any local flood history or consult with neighbors to gauge how often flooding happens.
Financial Buffer: Think about your ability to cover a higher deductible. If an unexpected flood does occur, having a $5,000 out-of-pocket expense could be manageable for you, or it could stretch your finances. If you feel confident that you could pay that amount without hardship, the lower premium option might be viable.
Long-Term Perspective: Since this is a new investment, consider how long you plan to stay in the home. If it’s a short-term investment, the lower premium might save you money in the near term. However, if you’re planning to stay long-term or want peace of mind, investing in better coverage could pay off.
Shop Around: If possible, continue to seek more quotes from other providers. Sometimes you can find better combinations of coverage and premium. A local independent agent might also help you find options better tailored to your situation.
Policy Reviews: Once you choose a policy, keep in mind that you can always review your coverage in the future. As your financial situation changes, or if more favorable options become available, you can adjust accordingly.
Ultimately, you’ll want to balance your financial constraints with the peace of mind that comes from having adequate coverage. Good luck with your decision!