Homeowner Insurance rate reduction for people who don't have valuables

[Unionville]

I encourage people to check details of what their home owners insurance to see what unnecessary things it covers. I just discovered a they were covering me for about $200,000 worth of valuable items inside the house (jewelry, art etc), but I don't own anything valuable, so I got a significant reduction in insurance price.

[Ron Scott]

I encourage people to check details of what their home owners insurance to see what unnecessary things it covers. I just discovered a they were covering me for about $200,000 worth of valuable items inside the house (jewelry, art etc), but I don't own anything valuable, so I got a significant reduction in insurance price.

What value did you place on contents? And what was the premium reduction?

[Unionville]

I encourage people to check details of what their home owners insurance to see what unnecessary things it covers. I just discovered a they were covering me for about $200,000 worth of valuable items inside the house (jewelry, art etc), but I don't own anything valuable, so I got a significant reduction in insurance price.

What value did you place on contents? And what was the premium reduction?

We didn't put any value on contents, they just had a standard insurance rate based on square footage of our house (and a few other things like "do we have trees"). It's only after we made an appt with an agent (AAA) to dissect this agreement in detail was it revealed they insured us for all these valuables they assume they standard household had.  We got about 25% off our policy.  We've read the policy many times over the 20 years we've had it, and never had this been obvious. Wish I'd known sooner. 

[LD_TAndK]

Wow yeah I have $174,000 of personal property coverage. I doubt it would cost more than 50k to replace everything inside my house with brand new items.

Another area to potentially trim fat, there's $69,000 of Loss of Use Expenses coverage. To "maintain a normal standard of living" if I have to temporarily move out.

Do mortgage underwriters or law require either of these?

[uniwelder]

This is a great idea. I have ‘landlord’ policies on my rentals which does the same thing, covering the structure and appliances. It probably knocks $150/year off the cost versus a standard home policy. My home policy has 200k personal item coverage, but I should look into reducing that.

[bacchi]

When I first bought my place, and was otherwise living like a student, I tried to get this decreased. The agent was incredulous -- "You have more than you think! -- and demanded a signed letter requesting the change.

[Zamboni]

^Clearly the agents don't buy all of their wood furniture and art and kitchen stuff at the thrift shop like reasonable people should. . . . and even electronics these days. There are some really nice flat screen TV's at thrift shop by me regularly.

[Mr. Green]

Our homeowners insurance uses coverage of 25% of the house value on contents and it's non-negotiable. Additional coverage can be added for high-value possessions but you can't drop it lower.

[wageslave23]

When I first bought my place, and was otherwise living like a student, I tried to get this decreased. The agent was incredulous -- "You have more than you think! -- and demanded a signed letter requesting the change.

Yeah I was told I couldn't get rid of this coverage.  I guess insurance agents don't understand the concept of only insuring against losses that you can't self insure. I could replace everything I need in my house for $10k. I don't need insurance for that. I have that in my checking account. It's why I don't have full coverage on my vehicles because it wouldn't be a big deal if I had to replace them.

[secondcor521]

When I first bought my place, and was otherwise living like a student, I tried to get this decreased. The agent was incredulous -- "You have more than you think! -- and demanded a signed letter requesting the change.

Yeah I was told I couldn't get rid of this coverage.  I guess insurance agents don't understand the concept of only insuring against losses that you can't self insure. I could replace everything I need in my house for $10k. I don't need insurance for that. I have that in my checking account. It's why I don't have full coverage on my vehicles because it wouldn't be a big deal if I had to replace them.

My homeowner's also excessively insures the contents of my house.

What I've done is raise my deductible to be very high.  Lowers the cost of my insurance a lot and gets me closer to the self-insurance aspect I want.

I don't have a mortgage any more, but if you do, the mortgage might impose constraints on what you can do insurance-wise.

[cool7hand]

Our homeowners insurance uses coverage of 25% of the house value on contents and it's non-negotiable. Additional coverage can be added for high-value possessions but you can't drop it lower.

Change companies?

[RetiredAt63]

^Clearly the agents don't buy all of their wood furniture and art and kitchen stuff at the thrift shop like reasonable people should. . . . and even electronics these days. There are some really nice flat screen TV's at thrift shop by me regularly.

Some of that "stuff" may be things like kitchen cabinets and laundry room cabinets.  They were part of my "stuff" when my basement flooded and all the base cabinets had to be replaced in the laundry room.

The other issue is that it may take a lot of time to replace the items that it took a lot of time to find at thrift shops.  So it depends on how urgently you would want to replace things.

I look at my hobby items - my floor loom plus bench and some accessories cost me $500 CAN, but they rarely show up for sale used.  One near enough for me to drive to pick it up might show up next week, or not for a few months.  A new one with the same accessories would cost, with tax, $3864 CAN.  And it would be in pieces and I would have to assemble it.   My New Zealand spinning wheel, bought used but still in the original box, was $600 NZ back in 2020.  It is over $1000 CAN now.  I recently saw one on Kijiji for $1200 CAN.  Higher than retail, because for things from overseas there are huge backlogs on orders.

[Unionville]

Wow yeah I have $174,000 of personal property coverage. I doubt it would cost more than 50k to replace everything inside my house with brand new items.

Another area to potentially trim fat, there's $69,000 of Loss of Use Expenses coverage. To "maintain a normal standard of living" if I have to temporarily move out.

Do mortgage underwriters or law require either of these?

Agree 100%. My husband and I could not think of anything we have of any value except computers. (which can easily be rebought for cheap).

BUT the one thing I did want was what you mentioned you don't need (having to move out insurance). If you live in an earthquake/fire prone area like I do, with extremely high housing prices, you can easily spend $2,000 a week for a mediocre hotel room - while you home needs being repaired. Unusual situation - but something I had not considered when I observed other people dealing with it.

[Ron Scott]

When I first bought my place, and was otherwise living like a student, I tried to get this decreased. The agent was incredulous -- "You have more than you think! -- and demanded a signed letter requesting the change.

Yeah I was told I couldn't get rid of this coverage.  I guess insurance agents don't understand the concept of only insuring against losses that you can't self insure. I could replace everything I need in my house for $10k. I don't need insurance for that. I have that in my checking account. It's why I don't have full coverage on my vehicles because it wouldn't be a big deal if I had to replace them.

I don’t think the agents are at fault here. Come carriers probably price to a product that has the standard contents set to 50% of the Coverage A amount. You can shop around.

Need to think about replacement vs. actual cash value for some of these things too. I was very surprised to hear the OP got a 25% reduction in his total premium for reducing contents. Good deal.

Also good practice to have your auto and home combined (discount) and increase your deductibles so you self-insure the lower amounts.