Homeowners insurance can be a substantial investment, depending on where you live and the insurance policy you purchase. Homeowner insurance policies come with varying price tags based on a long list of conditions. Some of the conditions are under your control, and you might be able to find some homeowners insurance savings if you know what to negotiate. Here are several tips to save on homeowners insurance:
Shop around
Check with several different home insurance companies to get rate quotes. An independent insurance agent can provide rate quotes from multiple companies. Ask around: Do your friends and family like their home insurance company?
Buy your home and auto policies from the same insurer
Insuring your car and home with the same company often will give you a package discount. This is a good tool to use when shopping around. Usually the agent can tell you what percent the discount is for insuring your car and home together.
Raise Your Deductible
Before your homeowners insurance company pays any claim, you have to pay a portion of the loss. That’s known as your deductible. If your deductible is higher, that means you pay more of a claim and (more important) your insurer pays less. Insurance companies love that. So he higher your deductible, the more money you save on your premiums. The average cost of homeowners insurance is built on a deductible of $500. If you think the odds of having a claim are very low, raise your deductible to $1,000 or more. You migh save as much as 25 percent.
Upgrade your security
Things like deadbolt locks, burglar alarms, fire extinguishers, and smoke detectors can earn you a discount. In some cases, these discounts can offset most (if not all) of the additional costs, so it’s well worth checking with your insurer for details.
Stop smoking
Smoking accidents account for more than 23,000 residential fires every year. Some insurers offer to reduce premiums if no one in the home smokes.
Look for other discounts
Insurance companies love homebodies. They maintain their homes and are quick to spot problems. If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. And don’t forget about employers and professional associations either. Sometimes group insurance programs offer a better deal.
Maintain a good credit history
Many insurers now check your credit and can adjust your price based on your level of “risk” as judged by your credit history, where allowed by state law. Make sure your credit is in good shape when you apply for policies.
Ask about group coverage
Alumni and business associations often work out insurance deals with an insurance company, which includes a discount for association members. Ask your association’s director about any such deals.
Location, location, location
This one is tough to implement if you already own your home, but… Proximity to fire hydrants, fire stations, etc. can influence your premiums. Not surprisingly, closer is better. No, it doesn’t make sense to move to reduce your premiums, but it might be worth keeping in mind when buying a new home.
Stay with an insurer
If you’ve kept your coverage with a company for several years, you may receive special consideration. Several insurers will reduce your insurance rates by 5 percent after you stay with them for three to five years; and some companies will discount you as much as 10 percent after six years.
Check your policy annually
You want your policy to reflect the value of your home and belongings. If you review your policy every year, you will be able to make the necessary adjustments. If, for example, you just sold a valuable painting, you won’t need the same amount of coverage. But if you added a garage, you’ll need to increase your coverage.
Make payments electronically
Many companies now charge up to $5 for mailed payments, so have your payments automatically deducted to shave that cost. Sometimes the deductions can come from your credit card, so you don’t have to worry if the money is in your bank account when payment time comes.
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