Best Ways to Reduce Your Homeowners Insurance Premiums
Taking advantage of lesser-known homeowner insurance discounts and other innovative approaches can help you save money. Here are the 12 best ways to reduce your homeowners insurance premiums. Homeowners insurance is rarely discussed, but it could be costing you more money than you realize.
The cost of homeowners insurance can vary by hundreds of dollars depending on the insurance company from which you purchase your policy. Here are some things to think about when purchasing homeowners insurance.
The good news is that insurers offer a variety of discounts and incentives that can help you reduce the cost of your homeowners insurance.
Ways to Reduce Your Homeowners Insurance Premiums
Here are the 12 best ways to reduce homeowners insurance premiums and save more.
1. Shop around: Reduce Your Homeowners Insurance Premiums
It may take some time, but you could save a lot of money. Consult your friends, the Yellow Pages, or your state insurance department for advice. The National Association of Insurance Commissioners has information about insurers in your state, including complaints.
States frequently make information on typical rates charged by major insurers available, and many states provide information on the frequency of consumer complaints by companies.
Check out consumer guides, insurance agents, companies, and online insurance quote services as well. This will give you an idea of price ranges and which businesses have the best deals. However, don’t base your decision solely on price.
The insurer you choose should be reasonably priced and provide the level of service you would expect if you need assistance filing a claim. So, when evaluating service quality, use the complaint data cited above and speak with a number of insurers to get a sense of the type of service they provide. Inquire about what they would do to reduce your costs.
Rates for identical homeowners insurance coverage can vary greatly between companies. Some homeowners could save $1,000 or more per year by finding the best rate.
Many companies websites have tools that allow you to enter some basic information and get quick home insurance quotes. Comparing rates from various companies will allow you to see if you can save money by switching insurers. You can also request that an independent insurance agent or broker shop around for you.
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2. Raise your Deductible: Reduce Your Homeowners Insurance Premiums
According to the terms of your policy, deductibles are the amounts of money you must pay toward a loss before your insurance company begins to pay a claim. The higher your deductible, the less you will have to pay in premiums. Nowadays, most insurance companies recommend a $500 deductible.
If you can afford to raise your deductible to $1,000, you could save up to 25%. Remember that if you live in a disaster-prone area, your insurance policy may include a deductible for specific types of damage. If you live near the East Coast, you may have a separate windstorm deductible; if you live in a state prone to hail storms, you may have a separate hailstorm deductible.
Raising your deductible puts money in your pocket each month that would otherwise go to your insurer. Just make sure you have enough money set aside to cover a larger out-of-pocket expense if you need to file a claim.
3. Buy your Home and Auto Policies from the Same Insurer
Some companies that sell homeowners, auto, and liability insurance will reduce your premium by 5 to 15% if you purchase two or more policies from them. However, make certain that the combined price is less than the cost of purchasing the various coverages from different companies.
4. Make your Home more Disaster Resistant: Reduce Your Homeowners Insurance Premiums
Find out what steps you can take from your insurance agent or company representative to make your home more resistant to windstorms and other natural disasters. By installing storm shutters, reinforcing your roof, or purchasing stronger roofing materials, you may be able to reduce your premiums.
More so, older homes can be retrofitted to make them more earthquake-resistant. Consider upgrading your heating, plumbing, and electrical systems as well to reduce the risk of fire and water damage.
5. Don’t confuse what you paid for your house with rebuilding costs
The land beneath your house is not vulnerable to theft, windstorm, fire, or any of the other perils covered by your homeowners insurance. As a result, don’t consider its worth when deciding how much homeowners insurance to purchase. If you do, you will be charged a higher premium than is necessary.
6. Make your home more secure
You can usually get at least a 5% discount on a smoke detector, burglar alarm, or deadbolt locks. Some companies will reduce your premium by as much as 15% or 20% if you install a sophisticated sprinkler system and a fire and burglar alarm that alerts the police, fire, or other monitoring stations.
These systems are not cheap, and not every system qualifies for a discount. Before purchasing such a system, find out what type your insurer recommends, how much the device will cost, and how much you will save on premiums.
7. Maintain a Good Credit Record: Reduce Your Homeowners Insurance Premiums
Having a good credit history can help you save money on insurance. Credit information is increasingly being used by insurers to price homeowners insurance policies. In most states, your insurer is required to notify you of any adverse action, such as a higher rate, at which point you should double-check the accuracy of the information on which the insurer relied.
Pay your bills on time, don’t take out more credit than you need, and keep your credit balances as low as possible to protect your credit. Check your credit report on a regular basis and have any errors corrected as soon as possible to ensure that your record is accurate.
8. Continue to Use the Same Insurer
If you’ve had your insurance with the same company for several years, you may be eligible for a special discount as a long-term policyholder. Some insurers will reduce your premiums by 5% if you stay with them for three to five years, and by 10% if you stay with them for six years or more. However, make sure to compare this price to that of other policies on a regular basis.
9. Look For Other Discounts: Reduce Your Homeowners Insurance Premiums
Companies provide a variety of discounts, but not all of them offer the same discount or the same amount of discount in all states. For example, because retirees spend more time at home than working people, they are less likely to be burglarized and may notice fires sooner. Retirees also have more time to devote to home maintenance.
Some companies may offer a discount of up to 10% if you are at least 55 years old and retired. Some employers and professional organizations manage group insurance programs that may provide a better deal than you can find elsewhere.
10. If you are on a Government Plan, look for Private Insurance
If you live in a high-risk area, such as one that is particularly vulnerable to coastal storms, fires, or crime, and have been purchasing homeowners insurance through a government plan, you should consult an insurance agent or company representative, or contact your state department of insurance, for the names of companies that might be interested in your business.
You may discover that there are steps you can take to purchase insurance at a lower cost in the private market.
11. Consider the Cost of Homeowners Insurance When you’re Buying a Home
If you buy a home near a fire hydrant or in a community with a professional fire department rather than a volunteer fire department, you may pay less for insurance. If your home’s electrical, heating, and plumbing systems are less than ten years old, they may also be less expensive.
Consider a brick home if you live in the East because it is more wind resistant. If you live in an earthquake-prone area, consider buying a wooden frame house because they are more likely to withstand this type of disaster. Choosing wisely could reduce your premiums by 5 to 15%.
Examine the CLUE (Comprehensive Loss Underwriting Exchange) report for the home you want to buy. These reports contain the property’s insurance claim history and can assist you in determining some of the issues the house may have.
12. Once a year, review your policy limits and your possession’s value
You want your policy to cover any major home improvements or purchases. But you don’t want to pay for coverage that you don’t require. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, reduce or cancel your floater (additional insurance for items whose full value is not covered by standard homeowners policies, such as expensive jewelry, high-end computers, and valuable art work) and pocket the difference.
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