Am I being taken for a ride?
We’re reviewing our home insurance due to tight finances. We purchased our home three years ago, and our current policy costs $3,500 per year with a $10,500 deductible. We reside in Northern Arkansas and are exploring different rates, but we won’t get any responses until Friday. In the meantime, I’m trying to determine if our current premium is reasonable or excessively high. Our dwelling coverage, which we established three years back, is $475,000.
It sounds like you’re being proactive about reviewing your home insurance, which is definitely a good idea, especially if money is tight. A $3,500 annual premium and a $10,500 deductible does seem on the higher side for many areas, but several factors can influence this.
Dwelling Coverage: Your dwelling coverage of $475k might be more than what is typical in your area, depending on local real estate values. Make sure that figure accurately reflects the current rebuilding cost of your home rather than its market value.
Location: Northern Arkansas can have varying rates depending on factors such as proximity to bodies of water (flood risk), crime rates, and natural disaster susceptibility (like tornadoes).
Coverage Levels: Review the specifics of what your policy covers. Sometimes higher premiums are justified if you’re getting extensive coverage or additional protections.
Comparative Rates: Once you get quotes back from other insurers, compare them thoroughly not just on premiums, but also on deductibles, coverage limits, and any exclusions that might apply.
Discounts: Make sure to ask about any discounts that could apply to you—like multi-policy discounts if you bundle auto insurance, or discounts for security systems.
In short, it’s a good idea to shop around and see what others are offering, but also evaluate your coverage needs closely. Don’t hesitate to reach out to an insurance agent for more advice tailored to your situation.