Your Money_ The Missing Manual - J. D. Roth [114]
Tip
If your credit has improved since you bought your car, ask your insurance company to re-check your credit score and see if they'll lower your premium.
Don't pay monthly. Insurance companies charge a few bucks each month for monthly billing. To avoid that fee, pay every 6 months or even once a year, if possible. If you have to pay monthly, use their autopay program, which costs less because they don't have to send you a paper bill unless your premium changes.
Though it'll always cost more to insure a new Corvette than a Corolla, one of the best ways to keep costs low is to keep your driving record clean. Insurance companies charge you based on how likely you are to file a claim—and accidents are the biggest source of claims. Some insurance companies offer discounts for taking safe-driving courses. Others give low-mileage discounts—the less you're on the road, the safer you are. So be sure to ask about all the discounts you qualify for.
Homeowners Insurance
Your home is probably the most valuable thing you own. Plus, it's filled with all of your Stuff. If your house burned down or got burgled, that would certainly qualify as a financial catastrophe—which is exactly what insurance is designed to avert. It's impossible to give a specific figure since everyone's situation is different, but you should carry enough insurance on your home to protect you in case of just such a disaster.
Homeowners insurance policies have three main parts:
Dwelling coverage insures your home in case it's damaged or destroyed. You want a guaranteed replacement cost policy, which requires the insurance company to fully rebuild your home. (Other policy types may not offer enough coverage.) But you don't need a policy that covers the full resale value of your property, since that includes your land, which doesn't need to be insured.
Personal property coverage insures the Stuff inside your house, like clothes and furniture, and usually also insures the personal property you have with you while you're away from home. Your insurance can be for either actual cash value (how much your things are currently worth) or replacement cost (how much it would cost to buy them new). The latter is your best bet: You should carry insurance that would pay you to replace your belongings, not pay you based on what the insurance company thinks they're worth.
Tip
To help settle claims in case of a disaster, keep a record of the things you own (including receipts for expensive items). Use your digital camera to create a photo (or video) inventory of your Stuff, and keep a written record somewhere safe or use an online tool like KnowYourStuff.org or StuffSafe.com.
Some people buy floater policies to cover things like jewelry and antiques. Before doing this, check your personal property coverage—you may already have enough insurance to cover these kinds of items. (In order to be covered, your policy may require you to notify your insurance company if you have over a certain amount.)
Liability coverage protects you if somebody is hurt on your property and sues you. Most policies cover you off your property, as well. You should have at least as much coverage as your net worth, and some experts say you should have twice your net worth. If someone trips on your doorstep and breaks his collarbone, say, he just might follow through on his threat to sue you for everything you own.
Most homeowners policies contain other pieces, like insurance for loss of use (which covers you if you have to live elsewhere while your home is being repaired). It's important to review your policy every year or so to be sure you have the right amount of coverage. (If you want disaster insurance for earthquakes, floods, or hurricanes, you'll have to ask your insurance agent how to get it; it's usually not part of a standard homeowners policy.)
To lower the cost of homeowners insurance, follow the general insurance tips on General Insurance Tips, and take steps to reduce