Every day we are looking for ways to reduce our expenses. The cost of homeowners insurance is one of those unavoidable expenses that come along with owning a house. The price of homeowners insurance can vary depending on your location, the age of your home, and on the insurance company, you buy your policy from.
Whether you are considering your home insurance renewal or shopping for a new insurance policy, finding the best option to cut costs and save money is essential.
Here are some simple ways to lower costs on your home insurance without reducing your coverage:
1. Shop around
The first step towards lowering your home insurance is to shop around for the best rates.
Check the National Association of Insurance Commissioners (www.naic.org) for information to help you choose an insurer in your state, including complaints. Make sure to check consumer guides, insurance agents, companies, and online insurance quote services.
The price is an important aspect, don’t forget about coverage and quality services. While you could save a bit, you may find you don’t have enough home insurance to cover you in a major disaster.
2. Raise your deductible
Deductibles are the sum of money you have to pay facing a loss before your insurance company begins to pay a claim, according to the terms of your policy. If you want to save on your monthly insurance costs, consider raising your homeowners deductible, which could spare you 25% or more on premiums.
Usually, insurance companies start giving discounts at a $500 deductible and increase the premium as your deductible increases. Most companies offer deductibles up to $10,000.
When you choose your premium value, consider the cost of repairs or other problems that would prompt you to file a claim. By avoiding small claims, you keep the premiums from increasing.
High deductibles are the best option for people who don’t expect to make claims too frequently.
3. Bundle Your Policies
Nowadays many insurance companies will give you a discount if you have two or more policies with them. Some companies that sell homeowners, auto, and umbrella coverage will take 5 to 15 percent off your premium.
As with shopping for single policies, comparing packages from a few different companies can be smart.
Make sure this mixed price is lower than buying the different coverages from different companies.
4. Improve home security
Home security systems may lower the chance you’ll need to make a major claim on your homeowners insurance.
Some companies offer a lower premium by as much as 15 or 20 percent if you install a home security system, smoke detectors, and fire alarms.
Check with your insurance company before purchasing a system to learn whether it meets the requirements because not every system qualifies for a discount.
5. Seek out other discounts
Insurance companies offer a variety of discounts to homeowners for everything from paying your annual premium in full upfront to keeping your policy for more than three years.
Some companies offer senior discounts to customers of a certain age. Others might give discounts to veterans, students, or current members of the military. According to Insurance.com, the most significant discount—more than 35%–goes to new construction owners.
Make sure you are getting all of the discounts for which you are eligible.
6. Maintain a good credit record
Insurance companies often check your credit score before assigning you a premium. If you have bad credit, your premiums will be higher because your insurance company sees you as a high-risk customer.
To protect your credit record, always pay your bills on time and don’t obtain more credit than you need. Make sure to check your credit record regularly.
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