Last Updated on Apr 8, 2020 by James W

Before potential new home buyers even begin thinking about the financial aspects, their thoughts naturally turn to ways they can transform the house they’re currently touring into their very own customized home. That could mean anything from new paint to new landscaping to a new addition. For more ideas, turn to a resource like

But we’re getting ahead of ourselves, because before the first painting tarp covers the floor, all the financial aspects of home ownership must be squared away. Many mortgage companies have ongoing relationships with certain insurance companies, so the broker will gladly steer new homebuyers to these providers. Such an arrangement may be the most time-saving one available, but it is not necessarily the most financially sound alternative.

The Best Rate

Insurance rates mostly depend on risk. So, the lower your risk, the lower your rate. Here are some good ways to address this issue:

  • Theft: These losses are some of the most common homeowners’ insurance claims, and also some of the easiest ones to prevent or at least greatly reduce the likelihood of occurring. Simple things like deadbolt locks on all exterior doors and accent lights that double as security lights are an excellent deterrent to would-be thieves. Moreover, a home security system may make your home up to three times less likely to be targeted, so such a system could be a worthwhile investment.
  • Fire: Similarly, a sprinkler system reduces fire and smoke-related losses by as much as 70 percent, and with the average fire claim costing over $30,000, the insurance company will stand up and take notice if you install such a system.
  • Dogs: Animal attacks account for about a third of the homeowners’ insurance claims in the United States, so you may want to think twice about keeping certain kinds of animals near residential spaces.

There are some other ways to lower homeowners’ insurance rates as well, such as paying monthly bills by electronic debit and bundling policies with the same company (more on that below).

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The Best Type of Coverage

Most homeowners’ insurance policies let the owners select coverage amounts for certain kinds of situations, such as:

  • Land,
  • Theft,
  • Fire,
  • Mold, and
  • Vacant home.

Most people need more coverage in certain areas, and less in other areas. For example, if the home is in a dry environment, mold insurance may be less of a priority. And, if the owners are semi-retired or frequent travelers, good vacant home and theft insurance coverage is a must, because it may only be a matter of time before evildoers pick up on house usage patterns.

Coverage amount is important as well, because there is usually a significant cost difference between Actual Cash Value (ACV) insurance and Replacement Value (RV) insurance, because the former takes depreciation into account but the latter does not.

The Best Company

Customer loyalty discounts, such as multi-policy and renewal discounts, are usually the steepest ones. So, it’s best to do lots of shopping around before you sign on the dotted line, and then stick with that company through thick or thin.

Share your new home fantasies with your insurance broker. If your plans include a new room or other significant alterations, have a general idea about how these changes might affect your rates.


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