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9 Tips to Lower Your Homeowners Insurance Costs
- Shop Around
It’ll take some time, but you could save a good sum of money. Ask your friends, check the Yellow Pages, check consumer guides or contact an independent insurance agent. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don’t consider price alone. The insurer and agent you select should offer a fair price and deliver a quality service you would except if you needed assistance in filing a claim.
- Raise Your Deductible
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay the claim, according to the terms of your policy. The higher the deductible, the more money you can save on your premiums. These days most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as an additional much as 25%. Higher deductibles above $1,000 are also available for additional discounts.
- Don’t confuse what you paid for your house with rebuilding costs
The land under your house isn’t at risk from theft, windstorm, fire and other perils covered under your home insurance policy. So don’t include its value in deciding how much homeowners insurance you buy. If you do, you will pay a higher premium than your should. You should be insuring your home for what it will cost to rebuild only the structure itself.
- Buy your home and auto policies with the same insurance company or agent
Some companies that sell home insurance and auto coverage will take 5% to 20% off your premium if you buy two or more policies with them. But make certain this combined price is lower than buying the different coverages from different companies.
- Improve your home security
You can usually get discounts of at least 5% for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to reduce your premium by as much as 15% to 20% if you install a centrally monitored fire or burglar alarm.
- Maintain a good credit record
Establishing a solid credit history can cut your insurance costs. Insurance companies are increasingly using credit information to price home insurance policies. In most states, your insurance company must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurance company relied on. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible.
- Stay with the same insurance company
If you have kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurance companies will reduce their premiums by 5% if you stay with them for 3-5 years and by 10% if you remain a policyholder for 6 years or more. But make certain to periodically compare this price with that of other policies.
- Review the limits in your policy and the value of your possessions at least once a year
You want your policy to cover any major purchase or additions to your home. But you don’t want to spend money for coverage you don’t need.
- When you’re buying a home, consider the cost of home insurance
You may pay less for insurance if you a buy a house close to a fire hydrant or in a community that has a professional rather than volunteer fire department. If may also be cheaper if your home’s electrical, heating, roof and plumbing systems are less than 10 years old.
Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are thinking of buying. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have.
Remember flood insurance and earthquake damage are not covered by your standard home insurance policy.
INSURANCE PRODUCTS ARE: NOT DEPOSITS; NOT OFFERED AS A CONDITION TO ANY BANK LOAN, PAYMENT OR SERVICE; NOT FDIC INSURED; NOT BANK GUARANTEED; AND MAY GO DOWN IN VALUE.
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