Choosing between lower premiums and better coverage can be tricky! I recently purchased a home and have been facing challenges with securing insurance due to the home’s age and other considerations. Currently, I’ve received two quotes. The first one is $2,016 per year but lacks coverage for overland flooding, which is a concern in this area. The second quote is approximately $3,200 annually and includes overland flood coverage. There’s also an option to lower that premium to $2,600 by increasing the deductible from $2,500 to $5,000, but that feels quite steep.
I’m feeling stuck in my decision-making. This property might not be the best investment, and while the premium costs are important, so is the risk of facing a large expense from an overland flood. I’d love to hear your thoughts!
It sounds like you’re in a tough spot, and it’s definitely a common dilemma when it comes to insurance. Here are some perspectives to consider:
Assess Flood Risk: First, think about how likely overland flooding is in your area. If it’s a significant risk, the coverage might be worth the extra premium. You could also check FEMA flood maps or talk to neighbors for insights on previous flooding events.
Financial Impact of Flooding: Consider the potential financial impact of a flood. Repairs can be incredibly costly, and having to cover them out of pocket could outweigh the higher annual premium. If a flood were to occur, would the financial strain be manageable without insurance?
Long-Term Investment: If the property is meant to be a long-term investment, it’s often wise to prioritize better coverage. Lower premiums can feel good in the short term, but if it leads to substantial losses later, it can be financially devastating.
Deductible Considerations: Doubling your deductible to $5,000 could mean you’ll need to save more for potential claims, but it can also lower your premium significantly. Think about your current savings and whether you could comfortably cover that deductible if you ever had to file a claim.
Shop Around: If you haven’t already, consider getting more quotes. There might be insurance companies that specialize in homes like yours that could offer better rates or coverage options.
Speak with an Insurance Advisor: Sometimes an expert can provide clarity. They can help you weigh the risks and benefits of each option based on your specific situation.
Ultimately, balancing peace of mind and financial reality is key. If flooding is a serious concern in your area, it might be worth investing in the coverage, even if it means a higher premium now. Whatever you decide, make sure you feel comfortable with how well you’re protecting your investment.