Homeowners Insurance Survival Blueprint: “Insider Secret” #5

For decades the typical homeowners policy (called an “HO-3 Special Form” in industry lingo) has carried one deductible on the policy. Some variations exist where you can have separate deductible for your roof, but soon that could become common practice…

If you view your homeowners insurance policy as a tool for offsetting a significant loss, like your roof getting blown off, or the kitchen being torched because of a cooking accident, or your basement being completely flooded because your sump pit overflowed when the power went out and your battery backup sump pump obviously wouldn’t work and you didn’t wake up until your basement was in 26” of muddy water…this happened to me and my wife, that’s why it’s so specific in detail… but this kind of thing happens and it ran up over $10,000 in damages on our unfinished basement alone!

Those are the big claims. And when you’re looking at a $6,000-$100,000 or more claim then a $1,000 or $2,000 deductible isn’t as bad to swallow.

Matt’s “No Holds Barred” Step-by-Step For Saving Money In This “Crisis” Market

Go ahead and have your agent price a higher deductible, like $1,000.

If you save a couple hundred bucks then sweet.

Have your agent price higher deductible on any of your vehicles that have $0 or $100 deductibles on “Comprehensive” or “Collision” coverage. Ask for a peek at a $500 deductible. How much premium could you save per year?

If you save another couple hundred bucks by increasing those deductibles then put that savings, along with the increased homeowners deductible savings, into a separate savings account.

Throw a few bucks into it each month. I’m not saying $100, I’m saying a few bucks.

Let that build. The odds of you actually having a claim are slim, most people only have one significant (knock on wood) claim in their lifetime in regards to homeowners insurance claims. (I don’t have any stats to back that up either so don’t ask, it’s just a rule of thumb and based on industry experience).
If you could keep that separate savings account at about $1,500-2,000 then you’ve got a little nest egg for those “oh crap” claims. The ones that hurt.

That way, if a windstorm comes ripping through your neighborhood and takes your roof off causing $8,000 in damages, you can reach into your savings account and take out $1,000 and get the rest paid by your insurance company.

And if you don’t have any damage that year, then think about the savings you enjoyed.

And just let that balance roll each year. Leave it in there. Don’t touch it. Save money.

This is “Insider Secret #5″ in my 7-Part blog series on how you can prepare and survive the looming homeowners insurance crisis in 2012.

If you’d like me to mail you my full Urgent Report (a $97 value), click here and include your name and home mailing address. Your information will not be sold or compromised.