For most homeowners, their house is their single largest asset. It is essential that this valuable asset be well protected with a quality homeowners policy. Just because homeowners insurance is a necessity doesn’t mean that consumers should pay any more for it than they have to. 7 key strategies to save money on homeowners insurance:
Strategy #1 – Shop Around
You never know which types of deals and discounts you can get until you ask. Different insurance companies may rate the same property differently and the rating models themselves may change from year to year in some cases. Asking for quotes on a new policy may bring unexpected savings.
Also, if you live in a high risk area you may have only been eligible for a government plan. These plans are typically very costly and it will usually be worth your while to find a private plan, if possible. You may be surprised to discover that your home is now eligible due to changing circumstances or a change in the way a private company evaluates risk.
Strategy #2 – Stay Put
Sticking with the same insurance company can also often save you money on your homeowners policy. This second strategy is almost a polar opposite from the first strategy, but it can pay off in many instances. Insurance companies are often willing to reward loyalty and if you have multiple other types of policies with them such as auto, health, life, or other property insurances, then often you will be able to get a discount for having these policies all bundled together from the same company.
Even if your homeowners policy is the only one you get from that particular insurance company you may still be eligible for a long-term loyalty discount if you have had the policy for many years. It is usually worth your while to ask about these types of discounts before you change policies to a new company, even if you have gotten a slightly lower quote on a new policy.
Strategy #3 – Home Improvements and Upgrades
One of the single best ways to save money on your homeowners insurance is by making your home itself safer and less likely to have a claim. Home improvements like adding an impact-resistant roof or storm windows will help protect your home from dangerous weather. Rewiring old electrical systems will protect against fire and replacing old plumbing systems will help prevent costly leaks and water damage. A burglar alarm and security system will help keep you safe from theft and vandalism.
Not all upgrades and home improvements will qualify you for a discount and it will depend on the current state of your home, your policy, and your insurer; however, asking about these discounts will give you important information if you are already considering these types of upgrades. If you’ve already finished an upgrade or renovation project, call and ask your insurance company if it qualifies you for lower rates. The best thing about this category of discounts is that they are all things which will also either keep you and your family safer or improve the value of your home.
Strategy #4 – Reevaluate Your Policy and Coverage
One of the most simple ways to save money on any type of insurance policy is by raising your deductible or removing riders and coverage that you no longer need. For example, if the value of certain possessions has depreciated over time or you have sold valuable pieces, then you may not need as much personal property coverage. Likewise, if you have amassed a larger nest egg or your monthly expenses have gone down you may also want to consider raising your deductible since it could more easily be paid for out of pocket.
Another important factor is to make sure that you are correctly insuring the value of your house. A common mistake many homeowners make is to get insurance based off of the total amount they paid for the home and property. The physical property itself that the home is sitting on is obviously not in danger of theft or many of the types of damages that the home is. Thus it does not need to be include in coverage.
Strategy #5 – Maintain Good Credit and a Good History
Almost everyone understands that having a good credit score will help qualify them for better mortgages rates. What some people don’t realize is that a good credit score is also beneficial to insurance rates. Insurance companies view consumers with higher scores as a lower risk. If your score has recently gone up, ask if you qualify for a lower premium.
Your personal history with regards to the policy also makes a difference. Frequent claims may make your premiums go up. By contrast, however, maintaining a claim-free policy for several years may qualify you for special discounts.
Strategy #6 – Plan Ahead
Sometimes the best way to get a good homeowners rate is to plan ahead. Even before you buy your home, consider its proximity to fire departments and police stations. Consumers in low crime, safer neighborhoods will pay less in homeowners insurance for comparable coverage. Buying a home in a gated community or in in a neighborhood with a very active homeowners’ association usually results in lower premiums.
From a larger perspective, it is important to know that certain cities, regions, and states pay more for homeowners insurance. Different areas may be more or less prone to flooding, hurricanes, earthquakes, and tornados, etc. You may not want to give up your dream location just to save money on insurance, but it is important to understand that location will play an important role in deciding future premiums and costs.
Strategy #7 – Ask About Other Discounts
A final strategy worth considering is to simply ask about other discounts. Different companies may offer different discounts and your eligibility may have changed since you first signed up. Some common discounts to ask about are senior discounts, discounts for automated payments, and non-smoker discounts.
If you are unsure whether or not you qualify for these or other discounts it is always best to ask your insurance agent. Establishing a relationship with a reliable, trustworthy insurance agent is one of the smartest steps you can take to save money on all types insurance policies, including homeowners insurance. These trained professionals will help you navigate the ins and outs of coverage and will remain vigilant for ways to save you the most money.