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When Was The Last Time You Shopped For Insurance On Your Home?

Sep. 01, 2020 4:10 PM ET19 Comments
David Crosetti profile picture
David Crosetti's Blog
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  • I am in the process of buying a beach house.
  • It's going to be multi-use.  I'm going to rent it out on a weekly rental schedule for 30 weeks or more.
  • When it's not being rented, then I will use it for my own entertainment. But owning a beach house can be "work."


Last year, when I got sick, we decided to make some changes to our situation.  Well, the family did, without me being very involved in those decisions.  One of them was to sell our beach house in Gulf Shores and my boat.  

But then, after 6 months, I got "better."  Then another 6 months and I was "even better" than previously.  

But, the kicker came when my wife decided that she wanted to buy another beach house and found one that was "perfect."  

And it is.  While it's not right on the beach or even a second tier lot, the house is in a gated community with two swimming pools, tennis courts, bike paths, walking trails, and the beach is a three minute drive in the golf cart.

We close on Friday, but we have been very busy getting all the details put together.  The best part is that my son didn't let her sell the boat and so, it's still there (he didn't like the offers that we were getting on it).  My wife on the other hand would have probably "given" the boat away.  

So, while I'm excited, I am most pleased about my boat still being in my possession.

But Wait, There's More:

But the reason I'm writing this is because during the process of buying the house, we were required to come up with all sorts of documents, pertaining to our financial situation.

One of the documents was our homeowner's policy and the "Declarations" page, which is a summary of your coverages and the price you pay.  Everything you need on one simple summary page.

And I have to admit, I was a bit surprised by how much I was paying, every year to insure my primary residence.  You see, we pay by the month with automatic debits and we do the same with our car insurance, which is "bundled" for a better price.  

So, when I got my homeowner's "declaration" page, I also got my auto insurance declaration page and then, I sent copies of those to both nationally recognized insurance brokers (Allstate, Farmers, etc) and to Independent Agencies that represent other insurance companies to check on the price of my insurance, relative to what others were offering.

The Results Were Staggering:

Keep in mind, that every agent got a copy of my homeowners "declaration" page for my home insurance and for my car insurance (two vehicles).  Every agent was charged with giving me insurance with the same coverages or if they could show me why I didn't need a specific coverage or could have a reduction in a specific coverage, it would be ok with me.  But I wanted apples to apples first and then they could do their magic.

Was It Hard To Get Quotes?

Let me tell you.  Insurance agents will scramble to get you a quote.  They will jump through fire to get you a quote.  They will kill their dog to give you a quote.  

You can start your "quote" adventure by going to Google and typing in "Independent Insurance Agents in (your town or county).  You will get a nice list and you can go to their web site and tell them you are interested in getting a quote for your home and car (bundle) and they will call you back.  

That's what they do.

When you have used a couple of independent agents, contact the big guys.  Allstate, Farmers, Nationwide, St. Farm, Progressive.  Pick a couple and send them copies of your "declarations."

The quotes will begin to roll in.  All you need to do is print them out as they do.  They will list the various coverages and you can look to see how they did vs. the original "declaration page" and in the quotes, they will give you "the price."

How Much Did We Save?

We were quoted a price for our home owners insurance, tied to our auto insurance, that will save us a little over $2000 a year.  Same coverages.  But a savings of $2000.

It's almost like my homeowners insurance is now free and all I'm paying for is my auto insurance.

That's a savings, my friend.

But Wait, There's More:

Remember the beach house?  Yeah, well, let me tell you a secret about beach houses.  If you are going to rent it out to weekly renters, then your policy is going to be a bit different from your standard homeowners policy, which is called an "HO3."  

You can probably do just fine and dandy with an HO3 policy, but I made sure to explain how the house would be used.  Not as a primary residence, but as a vacation home, with 30 weeks or more being rented out and the remaining weeks used by me and my family.

Well, liability insurance is going to be a bit more than what you might have on your primary residence.  "Loss of use" is going to be a bigger number.  If the house isn't in condition to be rented out, then you are losing money.  Who's going to pay for that?  Insurance.  So you need to bump up that number to be realistic and not to "save you money."

So we Googled independent agents and the big guys and got three independent agents to give us quotes and three of those big guys.  The big guys were Allstate, Farmers, and St Farm.

The quotes, for the same policy particulars ranged from $6500 a year (for the house) to a low of $3424 a year.  The low bid was for an insurance company that you and I have never heard of.  But in checking with three vacation rental management groups, they heard of the company and many of their owners use this insurance company on their beach homes.

A $3000 difference.

How much could you save? 

You might say, "Dave, I don't own a beach house."  But do you own a house?  How about cars?  Have you ever looked at the things on your declaration pages and asked, "Why am I paying for towing, when I already belong to AAA and they provide towing?"

But, let's say that you are fine with all of your coverages.  Would you make a change if you could save $1000?  How about $1500?  Or $2000?

But you can't save a dime unless you decide to "find out" how much you can save by asking for quotes.

Oh and this just in.  My new house is going to have a mortgage rate of 2.99% for 30 years.  My neighbor has a house across the street from mine.  He's paying 4.5% on his mortgage.  How much could he be paying if he inquired about refinancing his home?  

I don't know that he will, but my primary residence is paid for.  I'm not refinancing it but perhaps you should look at your loan rate and even approach your current lender to see what they would be willing to refinance you for.  For some reason they are beyond eager to refinance your home and lower your payment.  

Here's a tip.  Let them. 

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