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Todd H.

writes:

I have two part question about Homeowner's insurance. I just renewed my
annual homeowner's insurance with a well known insurance carrier. Is it
possible to change my mind and cancel it since i just found out Friday
that i can get a better deal with another insurance company or will i
have to wait until it expires next year? Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

The state probably only requires you to have liability insurance for
your car... but if you had a brand new $25000 car you paid cash for,
would you only buy liability insurance because it's the absolutely
cheapest insurance you could legally buy?

Your friend MAY be right with respect to what the mortgage holder
requires, but do you really want to be that sparsely insured? If
disaster struck, would new unknown fast talking buddy's company cut
you a check for enough to actually rebuild the house to liveable
condition to current codes? Or would you be stuck responsible for a
30 year mortgage on an unlivable piece of property that your insurance
company hasn't paid you quite enough to make livable? And say, you
ahve a total loss on the house due to say, fire and it burns to the
ground. If you only have the structure covered, How much do you think
you have in there in terms of furnishings? Clothing? Electronics?
Carpet? Draperies? Artwork? Lawnmower in the garage? Appliances?
I mean, we're potentially talking a hell of a reduction in coverage
for a mere $300/year.

3 things to do if you think this is worth $300:
a) review the insurance requirement wording in your mortgage.
This is in the closing paperwork (that ton of **** you
signed when you bought your house).
b) Call your existing insurance company to ask about this. I
bet they'd offer you the same lower level of insurance and
save you the same $300 or more perhaps if you reduce your
coverage like this.
c) Call your buddy and have his company put that quote in
writing so you can compare truly apples to apples. Research
his company's ratings too.
d) do a gut check and decide if this risk you're offloading
fro teh insurance company is something you have the
financial wherewithall to take if a tornado or fire
completely levels your house.

To your original question, no, there is generally no problem
cancelling insurance mid-year and transferring to another company.
You should get a prorated portion of your premium back for the unused
portion of the term for which you'd paid.

But to do all this crap for $300 ... I'm not sure that small a
difference would be worth my time to research the alternatives and it
smells like a sales trick to me.

Best Regards,
--
Todd H.
http://www.toddh.net/