Money Management

Home insurance is increasingly costly in the Sunshine State. Keep reading to learn how I’m coping and how you can save on necessary coverage too. 

My state of Florida is prone to hurricanes that can cause costly damage. The legal climate for insurers also isn’t very favorable in the Sunshine State, as a state Supreme Court ruling in favor of plaintiffs in 2017 opened the door to lots of property claims litigation.

So, it’s probably not a surprise that many insurance companies have decided they aren’t very interested in providing coverage to Florida homeowners. In fact, four major insurers have pulled out of the state in recent months, others have quietly stopped writing new policies, and some local insurers have become insolvent.

With fewer insurers and substantial risks for those that remain, insurance premiums have gone through the roof, with insurance premiums up 42% from last year. An Insurance Information Institute Analysis recently found that while the U.S. average for home insurance premiums is $1,700, the typical Floridian is stuck with a $6,000 bill.

My coverage is actually a little more than that due to the price and location of my house, so I’ve taken some steps to try to reduce my insurance costs to avoid draining my checking account with home insurance premiums. While these steps are especially important for people like me who are coping with rising rates, anyone can implement them to lower their own home insurance costs.

Shop around for insurance coverage

Shopping around and comparing insurance quotes is a good move when you’re trying to save money on policy premiums. When my insurance rates started to go up, I checked around to see what was out there. Even with the limited selection of companies continuing to offer coverage in Florida, I was still able to find a better deal with a different insurer that knocked a few hundred dollars off my premiums.

Shopping around for insurance coverage is easy. Anyone who wants to try this out can get several quotes online from different insurers to see if they can find a better deal.

Increase the policy deductible

To help bring my premiums down, I also opted to increase the deductible on my insurance policy.

We live in an area where the chances of hurricane damage exist, but aren’t great since we’re inland. So, I was comfortable gambling on the possibility I might have to pay more out of pocket in the event I had to make a claim — especially given that I have a large emergency fund in case I need to cover my deductible.

Adding $1,000 to my deductible resulted in around a 10% deduction in my premium costs. This is also something anyone can do as long as they are comfortable taking on the risk of paying more out of pocket in the event of a covered loss.

Make the home safer

Another important step I took was making my home safer. We made some upgrades to our home, including replacing some older windows with new ones that had a better hurricane rating, and our premiums went down around 8%. My insurer considered this a wind protection upgrade.

Homeowners who want to reduce their premiums using this approach should ask their insurer what kinds of home upgrades would result in a premium reduction. Don’t forget to take the cost of the upgrades themselves into account when considering how much this can save, as it’s not likely it would be worth making major upgrades you weren’t otherwise planning just to knock a few bucks off insurance premiums.

Bundle coverage

Finally, the last step I took was bundling my coverage and getting a policy from the same company for my homeowners insurance and my auto insurance. This saved me around 20% in total because I was able to reduce the cost of insuring both my house and my car.

I did make sure that the insurer I chose had a good reputation for claims handling for both home and auto policies though, as I don’t want to deal with problems if I must make a claim. Anyone who needs multiple policies can look into bundling coverage as well, but it’s worth confirming this won’t lead to subpar customer service.

By taking these steps, I made a meaningful impact on the cost of insurance even in a very expensive state where the insurance market is not friendly for consumers. Whether you live in Florida or somewhere where the insurance market isn’t such a disaster, implementing some of these techniques could work for you as well.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More 

Joining a warehouse club could be a smart move. But read on to see if it’s really necessary to join both Costco and Sam’s Club. 

If you’re someone who’s eager to save money on groceries and household supplies, then it could pay to get a membership to a warehouse club like Costco or Sam’s Club. The ability to purchase groceries and essentials in bulk could result in smaller bills. That’s important given how inflation is still a lingering problem.

Now, you may be torn between Costco and Sam’s Club, to the point where you’re thinking of signing up for both. But does that make sense?

A single warehouse club membership is probably enough

It’s true that Costco’s inventory can vary from that of Sam’s Club. So if you get a membership to both stores, you might find different products at each store.

But for the most part, a single warehouse club membership should suffice for the typical consumer or family. After all, Costco may have a few different brands of toilet paper and dairy products than Sam’s Club. But do you really need so many varieties of toilet paper and milk? Probably not.

Also, don’t forget that there’s a cost of joining Costco and Sam’s Club. For the former, a basic membership costs $60 a year while an Executive membership costs $120. At Sam’s Club, a basic membership costs $50 a year while a Plus membership is $110. Both the Executive and Plus memberships give you cash back on your purchases, so the extra cost to join can be worth it when you spend enough.

To be fair, Sam’s Club commonly runs promotions that allow you to save some money on your first year of membership. But let’s say you’re not eligible for such a deal. This means you’re looking at spending $110 a year for a basic Costco and Sam’s Club membership when you could instead be spending around half that much. Or, that $110 could buy you an upgraded membership at Sam’s Club, or almost a full Executive membership at Costco, for the benefit of cash back on the things you buy.

Be realistic about how often you’ll shop

It’s true that you might find certain items at Costco that you don’t find at Sam’s Club, or vice versa. But before you shell out the money for two memberships at the same time, think about your schedule. How often do you really have time to go grocery shopping? If you only have an hour or two each week, then a visit to both Sam’s Club and Costco may not be feasible — especially if those two stores aren’t near each other.

In fact, let’s say you join both warehouse clubs but only manage to visit each once a month. Will you potentially make back your membership fees? Maybe. All it takes to make back your $60 outlay for a Costco basic membership is $5 in monthly savings.

But that’s not the point. The point is that if you join both clubs at the same time, even if you make back your fees, it probably wasn’t necessary to bear both annual fees in the first place.

If you’re currently a member of Costco or Sam’s Club and are wondering what the other is like, ask a friend who’s a member to let you tag along for a shopping session. If you find that you like the other option better, make a change. But chances are, if you have memberships to both Costco and Sam’s Club at the same time, you’re going to end up throwing some of your money away.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

 Read More 

You may be tempted to pay your mortgage using a credit card. Read on to see why that may be a challenge — and also, not the best move. 

Generally, I try to charge as many expenses as I can on my credit cards. That way, I’m able to rack up reward points or cash back on my purchases, which effectively gives me free money.

But one bill I’ve never tried to put on a credit card is my monthly mortgage payment. And while you may be tempted to charge your mortgage payments on a credit card, you may find that doing so is challenging as well as costly.

Mortgage lenders generally won’t accept credit card payments

Merchants who accept credit cards are commonly charged expensive processing fees for that convenience. Many businesses are willing to eat that cost because it allows them to serve their customers. But mortgage lenders generally aren’t willing to eat those fees, and so they’ll commonly deny borrowers the option to charge their monthly payments on a credit card, says Quicken Loans.

But it’s not just avoiding processing fees that mortgage lenders are concerned with. Mortgage lenders want to make sure you’re able to keep up with your debt. And they don’t want you racking up more debt when repaying existing debt.

If you send your mortgage lender a check at the start of the month, that money comes out of your checking account. But if you pay your mortgage with a credit card, you may not end up paying the entire balance at once.

Meanwhile, as you carry that balance forward and interest accrues against you, your debt could cost you even more. That could make your total debt — including your mortgage — harder to manage. That’s not a risk mortgage lenders want to take.

There may be a workaround, but it could be costly

While mortgage lenders often won’t accept credit card payments directly, you may be able to work with a third-party processor to use one for your home loan payments. But in going this route, you’ll commonly be charged a fee. And that fee could wipe out the benefits you get from using your credit card.

Plastiq says you might be charged a fee of 1.3% to 3.5% to pay your mortgage by credit card. So, let’s say your credit card gives you 1% back on all purchases, and you owe $1,000 in monthly mortgage payments. Using your credit card will put $10 back in your pocket. But if you’re charged a 2% processing fee, it’ll cost you $20. So all told, you’ll be down $10, not up.

That’s why you’re generally best off not trying to pay your mortgage with a credit card. If you want to put expenses like gas and groceries on a credit card, do it. Chances are, you’ll get some bonus cash back in the process since these expenses are commonly eligible for that. But don’t reach for your credit card to pay your mortgage lender unless you’re in a really dire financial situation and that’s the only way to avoid defaulting on your home loan.

And even then, you may have some options, like putting your mortgage into forbearance. So talk things through with your lender before incurring expensive fees.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 Read More