Insurance: It’s Hard Insuring a Foreclosure!

I am having a hard time getting low insurance premiums for Little House.  I first found a great rate between $300-400. However, I found out by asking, that they most likely will not insure homes that were unoccupied with utilities turned off.  That means foreclosures!  So the agent told me I’m better off asking another insurance company, and then coming back to them after a year.  They told me if someone else insures the home for a year, they are willing to take it on later.

My next option was my current insurance company, which was quoting me $600.  That seemed high for the kind of home I purchased.  I changed my deductible to $5,000 to see if I could get it down to $500.  I also asked for the bare minimum amount I can write the rebuilding cost of the home at without losing “preferred home” status.  It was somewhere around $112K.   Originally, they had automatically used something like $120K.  Doubling the deductible seemed to do the trick!  Now I have to make sure I always have an emergency fund of $5,000 for the house and $2,500 for automobile deductible.  Yikes!  I’ve got to save $7,500 to set aside!

I also asked another insurance company who gave me an estimate of $750.  Originally they gave me $1280 and I told them that was ridiculous.  They deducted an alumni discount and brought it down to the $750.  They insured my friend’s home that has a basement and garage, is double the size of my house, but out in the western area of the state for so much less, so it’s surprising how much different risk factors affect rates.

Insurance company four gave me something less than $500 but when I asked to bundle my auto, the auto insurance was a lot higher than my current auto insurance, so in the end it probably won’t be worth it for me to leave my current insurance company.  This will be choice number 2 in case my current insurance company jacks up any rates.

I think a big part of my higher rate is based on the location I picked.  Little House isn’t in a great location.  I decided to go against the typical motto of “Location, Location, Location.”  I’ve been told to “lock up” by a friend.  I’m slightly concerned, but I did live by the projects in Chicago near UIC at one point, which is way more dangerous of an area by far.  My boyfriend said we could install lights on the outside of the home to shine around the house so that if anyone tries to break in, it will be in bright, plain view.

Recap of the quotations I got:

  1. Insurance Co #1 – $334/year
  2. Insurance Co #2 – $600/year adjusted down to $500/year
  3. Insurance Co #3 – $1280/year adjusted down to $750/year
  4. Insurance Co #4 – Between $400 and $500