Periodic review of our personal finances extends to many areas. Portfolio rebalancing helps your investments match changing time horizons and risk tolerances. As our families grow or coverage options change, we must review our health insurance for the best choices.
Home insurance is an essential cost that may not receive the same attention. Houses are not as dynamic in comparison to investments or healthcare. Unless moving, many homeowners rarely check their home policies.
However, checking your home insurance coverage for overlaps or excess coverage can yield instant savings. The process is also simple and time efficient with a potentially big ROI.
First time buyers and existing homeowners alike can benefit from a few practical steps.
Here is a home insurance checklist to get started:
Choose a Sensible Deductible
A sensible deductible results in month over month savings that is leverage for:
- College Savings
- Debt Reduction
- Meeting Monthly Expenses
You can speak with an agent to discuss the impact of raising deductibles on premiums. A practical deductible protects homes yet leverages savings to improve personal finances. Even in the instance of a small claim, the time value of money may pay for itself.
The time value of money as leverage: A dollar is more valuable today than at some date in the future, which is seen in inflation or other economic concepts. The monthly savings from a higher deductible are leverage to increase investment contributions or chip away at principal on debt.
Investment Manager Elliott Broidy is among the money managers known to consider money’s time value when making portfolio decisions. The same approach has everyday value to consumers, as well.
Savings on interest expense from credit cards or compounding investment returns can exceed out of pocket costs on home insurance claims.
Each situation is unique, but you may consider working with an agent to discuss the value of each insurance rider beyond catastrophes.