Smart Strategies to Tackle Rising Home and Renters Insurance Costs

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Insurance costs for homeowners and renters are on the rise, making it essential to understand how to protect your home and wallet effectively. In the latest episode of Better Financial Health in 15 Minutes or Less, Stacey Hyde explores various strategies to tackle these increasing premiums. Having personally experienced a 50% hike in her condo insurance, she shares valuable insights and actionable tips to help listeners manage their insurance costs without compromising on coverage.

One of the first steps in reducing your insurance premiums is leveraging home safety features. Many insurance companies offer significant discounts for homes equipped with advanced safety systems. For example, automatic water shutoff systems that detect leaks and prevent water damage can save you money on your policy. Additionally, having fire alarms, security systems, and other protective measures can lead to substantial discounts. Always ensure that you provide your insurance agent with the necessary certificates to validate these features.

Mold and fungi can be a homeowner’s nightmare, both financially and health-wise. Insurance policies often have limited coverage for mold-related issues, making it crucial to address any signs of mold swiftly. Regular maintenance and prompt action can prevent small mold problems from escalating into expensive repairs. Remember, mold is often excluded or minimally covered, so staying vigilant can save you a lot of money and trouble.

Flooding is another area where many homeowners may find themselves underinsured. Standard homeowner’s insurance typically does not cover flood damage, which can result from rising water levels overwhelming sewer systems or other causes. Given the increasing frequency of extreme weather events due to climate change, purchasing additional flood insurance is a wise decision. This coverage is usually available through government programs and can be relatively affordable, especially when compared to the potential cost of flood damage repairs.

Earthquake insurance is another consideration, particularly for those living near fault lines like the New Madrid. Standard policies usually exclude earthquake damage, and while additional coverage is available, it often comes with high premiums and deductibles. In the podcast, Stacey Hyde shares her experience of opting out of earthquake insurance after discovering that the policy did not offer the protection she expected. Instead, she emphasizes the importance of maintaining substantial cash reserves to cover potential earthquake damage, highlighting the need for a financial safety net.

For renters, bundling insurance policies can lead to significant savings. Many insurance providers offer discounts when you combine your renter’s insurance with other policies, such as car insurance. This can make renter’s insurance, which is already relatively affordable, even more cost-effective. Renters should not overlook the importance of having insurance to cover potential losses from fire, theft, or other incidents. Even if a landlord does not require it, renter’s insurance is a smart investment to protect personal belongings.

Understanding the fine print of your insurance policies is crucial. Many policies have exclusions and limitations that can leave you vulnerable in certain situations. For example, standard policies may not cover mold, flood, or earthquake damage, as previously mentioned. It’s essential to read your policy documents thoroughly and ask your insurance agent any questions to ensure you fully understand your coverage. Being informed allows you to make better decisions about additional coverages you might need.

Safeguarding essential documents is another critical aspect of home protection. Important papers should be stored in a safe, elevated location to protect them from potential water damage. For homes in flood-prone areas, storing documents on higher floors or in attics can prevent loss. Alternatively, keeping copies of vital documents at a separate location, such as an office, can provide an additional layer of security.

Overall, the podcast episode emphasizes the importance of proactive measures to manage rising insurance costs. By leveraging safety features, addressing potential issues like mold promptly, understanding the need for additional coverages, and maintaining a financial safety net, homeowners and renters can protect both their homes and finances. Staying informed and asking the right questions about your insurance policies ensures that you have the coverage you need without paying for unnecessary extras.

Tune in to the latest episode of Better Financial Health in 15 Minutes or Less to equip yourself with knowledge and strategies that can make a significant difference in managing your insurance costs and protecting your home.

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'Better Financial Health in 15 Minutes (or less!)' Podcast

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Our approach is to discover a client’s goals, determine the personal financial plan that is needed, and aid the client in reaching those goals. Our success is measured by how well our clients achieve their goals.
Hank has had a distinguished career in the financial services industry, including more than 40 years in the financial planning and securities fields. From 1985 to 2013, Hank provided fee-only financial planning services through his firm, Lifetime Planning, Inc. Hank merged his practice with Stacey’s in 2014. In addition, Hank is a member of both the local and the national chapters of the Financial Planning Association (FPA).
Hank received his bachelor’s degree in business administration from the University of Mississippi, where he also lettered in football. He received his initial securities training at Merrill Lynch. He was a financial planning consultant for the Memphis office of Ernst & Young and financial planner at Morgan Keegan & Company, Inc. from 1982 through 1984. In April 1984, Hank completed his CERTIFIED FINANCIAL PLANNER™ professional requirements with the College for Financial Planning in Denver, Colorado.
In addition to his financial planning practice, Hank has enjoyed serving on the boards of Presbyterian Day School, Second Presbyterian Church, University of Mississippi, and the Christian Community Foundation. Hank served as the chief financial officer of the Christian Community Foundation from its inception in October 1998 until October 2000. Hank enjoys reading, hunting, and attending baseball and college football games.
Clay serves Envision Financial Planning’s clients as the investment officer and portfolio manager. His duties include overseeing the firm’s investment process and money management strategies with a strong focus on “goals-based” investment planning.
As a firm, we believe in concentrating on things we can control such as:
Clay is a native Memphian and a graduate of the University of Mississippi. He began his career working for a regional broker/dealer specializing in fixed-income securities, and prior to joining Envision, Clay was an investment research analyst and portfolio manager for a private wealth management firm in Memphis. Clay currently holds his FINRA Series 66 securities registration and obtained his CERTIFIED FINANCIAL PLANNER™ designation in 2021.
In his free time, Clay enjoys playing golf, exercising, reading, and cooking with friends and family. He and his wife, Margot, have two boys named Callan and Wiley.