My New Blog

How to Lower Your Homeowners Insurance.

Here is a good one. If you had a homeowner’s Insurance policy from, I would say, 2003-2007, you are probably over-insured. WHY? Because the cost to replace has been coming down as compared to those years. My policy on the home I just purchased basically said my land value was about $8,000, and the cost to replace was near $120/foot, ( not even close ). I called my insurance company, and disputed it. What I realized was, an appraisal form that most are not familiar with ( the unit-in-place cost method or the complete quantity survey cost method) can substitute in the same detail a contractors estimate. The cost method on appraisal report most of you are familiar with is not applicable to insurance policies and is even noted in most reports that it is not intended for insurance purposes nor should it be used for such. Yet, I hear time and time again of insurance companies wanting a copy of the appraisal report and to review the cost section. The only importance is that the mortgage company wants a policy equal to the appraised market value. The quantity survey method appraisal form is important because insurance underwriters will take into consideration all data given to them. If they will consider a contractors’ estimate to dispute the cost to replace then the mentioned cost forms in detail will do the same thing. I have completed a lot of these forms on more complex appraisal assignments and they are very accurate. Remember, I am not talking about that small little cost section on the appraisal report.  The cost savings to you is significant. This is not chump change. I believe that if you can lower your property tax and lower your insurance cost than the savings per month is large. Just make sure you notify your mortgage company of the changes so they can change your next months’ payment so you don’t have to wait 4-6 months for an escrow analysis. I did it for my tax in February of this year for the 2008 taxes when I estimated them to be lower. Call me on this and I can show you how I can save you money.