You may want to downsize from your primary residence to a smaller home that suits your current stage in life. Choosing a house that fits your lifestyle based on where you are in life is also known as rightsizing. You can downsize or rightsize for various reasons, including reducing expenses like housing costs proportional to the size of the home you live in. Some of these costs to consider include:
• Utility costs
• Home maintenance
A smaller house can significantly reduce your expenses and impact your insurance coverage. So, if you are wondering how downsizing or rightsizing will impact your insurance coverage, read on.
1. Home Office Insurance Implications
A home office can alter your home insurance coverage and increase the cost. The insurance company may consider additional people who come to your house as an insurance risk, increasing your home insurance cost. If you plan to rightsize and cut costs, a downsized home should not have a home office.
2. Downsize Number of Cars
When downsizing the number of cars you have, you save on insurance costs. The insurance quotes for your family cars include the car model and how often you drive it.
If you own a sports car that’s expensive, it will cost more to insure compared to an SUV or a minivan. If you have two vehicles, you can eliminate the second one if that’s possible, depending on your family transport needs. This will save you money, especially on car insurance quotes.
3. Personal Auto Insurance Policy for Your Child
If your last child moves out, it will be wise to make sure the child has personal auto insurance coverage under their name. If they don’t have this policy, you might have to pay for expenses, or they will be expected to pay directly. Most auto insurance policies’ definitions of a family member require the family member to be part of your household.
4. Consider a Smaller House Without a Pool
A pool can be a liability, especially if you want to cut costs. As a homeowner, you will be liable for anyone that uses your pool with or without your permission. You may have to incur expenses up to 100,000 dollars in case of a pool accident. You can avoid these costs by not having a pool in your smaller house.
5. Smaller House Versus a Condo
Depending on your needs, you can choose to downsize to a condo or a smaller house. Condos are typically cheaper to maintain, considering that the condo association is responsible for the exterior walls, roof, and shared spaces. You will also not be thinking about landscaping.
Vargas & Vargas insurance is one of the premier local independent insurance agencies. We work for our clients and not the insurance company. We will customize your insurance coverage to your specific needs at the right price when downsizing or resizing. Contact us today — we’re here to answer all your insurance questions.