Saving Money on Homeowners Insurance
Even though the cost of
homeowners insurance ranges significantly, there are steps you can take to
reduce this necessary cost. Below are several tips for homeowners insurance
savings that you can take today.
Savings Tips for Home Insurance
Homeowners with a mortgage rarely give a second thought to paying for homeowners insurance because the expense is added to the mortgage payment each month, and it’s often a small portion of this monthly obligation. However, reducing the cost your homeowners insurance can add up to substantial savings in the long-run. Here’s how you can achieve that:
Change Your Deductible
Part of owning a home is the responsibility for maintaining it. Homeowners insurance is an essential component of this task. It helps protect you and your property against unforeseen events like theft, natural disasters, or other accidents and issues. While homeowners insurance is a necessity, as it’s typically required as part of having a home loan, the cost for coverage can vary greatly. The national average cost of homeowners insurance is just under $1,300 per year, but depending on where you live, the size of your home, and your possessions, this cost can be far higher.
The easiest place to save on homeowners insurance is by increasing your deductible. The deductible is the amount you pay out-of-pocket should you file a claim against your insurance policy – essentially the part the insurance company does not cover. Having a low or zero-dollar deductible increases the cost of your coverage, while having a higher deductible lowers it.
But before increasing your deductible, think about your ability to cover this out-of-pocket expense easily in case you need to use your policy benefits.
Combine Coverage through One Provider
Another way to reduce the cost of your homeowners insurance is to use the same insurance company for other coverage needs. For instance, many major insurance providers offer discounts for multi-policy accounts, ranging from 5 percent to 20 percent off your insurance premiums. Multi-policy coverage may mean having your auto insurance, homeowners insurance, or life insurance with the same provider. Be sure to check that the discount offered creates a more affordable plan before changing insurance companies.
Boost Your Home’s Security
As a homeowner, you may also have an opportunity to reduce your insurance cost by increasing your home’s security. This may involve adding cameras to the outside or inside of the home, installing an always-on security system, or even putting up a fence or locking gate.
Not all insurance companies offer the same level of savings for improving home security measures, but it’s worth looking into if you want to save on the expense of homeowners insurance.
The best move you can make in bringing down the cost of homeowners insurance coverage is to comparison shop. There are several insurance providers in the market today that can provide coverage that is affordable and easy to secure.
A quick online search may return a handful of providers able to offer quotes in a matter of moments. You can also ask for referrals from your neighbors, family members, or friends who are also homeowners. Before making a switch, be sure the coverage you are offered is comparable to your current homeowners policy, and that there are not any exclusions that reduce the value of your coverage with the new provider.
Keep Your Credit Strong
It may seem irrelevant, but having strong credit is a part of ensuring your homeowners insurance is affordable. Insurance companies, like lenders, evaluate your financial track record to assess risk. If you have a less-than-ideal credit history, insurance providers may perceive you as irresponsible. When that is the case, your homeowners insurance premium may be higher than if you had strong credit.
You can take several steps to improve your credit and financial history, including paying bills on time, minimizing negative marks like foreclosures and bankruptcies, and keeping your credit utilization ratio low.
Evaluate Your Home’s Value
Finally, bringing down the cost of your homeowners insurance may require a little work on your part when it comes to evaluating the value of your home and your possessions. Many homeowners to keep the same policy they took out when initially purchasing the home, but its value of the property and its contents is likely to change over time.
If you think you may need less coverage to protect your home against loss, provide this information to the insurance company. They may lower your premium in the process.
Changing your homeowners insurance can be a smart way to save money on a monthly basis, but it is important to read the fine print and understand the coverage before you do.
Sent in by Andrew Rombach, Content Associate, LendEDU
Photo courtesy of InsuranceDeals!