10 Ways To Save Big On Homeowners Insurance
A house is often the largest investment that an individual or couple will make in their lifetimes. It requires protection from the storms of life, but there is only so much you can do on your own. Tornados, hurricanes, earthquakes, and other acts of nature, can take a sturdy structure and reduce it to rubble overnight, sometimes in seconds.
A homeowners policy may not be able to stop these things from happening, but it can certainly help you pick up the pieces and move on when the worst happens. To keep things affordable, you have to minimize risk and take advantage of the opportunities that providers make available based on your history and the expectation of risk. Here are ten ways to do just that, and actually save big on your homeowners insurance policy.
One: A $1,000 Deductible
The higher your deductible is, the lower your premiums will be, but this is only commensurate with what you’re able to save on your own to handle any damages that might fall short of the limit. While many homeowners prefer the $500 deductible, that can result in a higher monthly premium. By bumping it up to $1k, you can take a little of the risk on yourself and reap the benefit should nothing happen.
Not only will the $1,000 deductible keep premiums down, it will also set a relatively low benchmark for you to reach throughout the year when it comes to savings. We recommend putting a little back with each paycheck. There are only 52 weeks in a year. That amounts to $19 and some change every week, and your deductible is covered.
Two: Shop Periodically.
Sites like HometownQuotes.com give you the opportunity to compare multiple companies at once when it comes to attaining the lowest homeowners insurance premium. Every so often, you should run a search and see what happens. The Internet, and particularly tools like our own, have made price-checks and online purchasing more competitive than ever before. You owe it to yourself to play the field every now and then.
Three: Distinguish Between Cost Of Home And Cost To Rebuild.
We’ve mentioned it before on this blog, but it bears repeating. Do not insure your home for its value. Insure it for whatever it would take to rebuild. That means the amount will change every year or two, so make sure you’re staying on top of it. Also, as USA.gov points out, “The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.”
Four: Buy Home And Auto From The Same Place.
If an insurer doesn’t offer discounts for home and auto together, then they are woefully behind the competition. And while you’re at it, consider adding disability and life, as there may be additional discounts available through those products as well.
Five: Apply Elbow Grease.
While you’re not necessarily going to make any improvements to the home that stand up against an F5 tornado, you can make renovations, updates, and repairs that will enhance the risk level of the home, at least enough to secure a discount from your provider. Add storm shutters, reinforce your roof, buy stronger roofing materials, and consider modernization of your heating, plumbing, and electrical systems. All of these things can reduce damages from windstorms and other natural disasters, resulting in a lower premium.
Six: Install Home Security.
According to USA.gov, “You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations.”
While some of these systems don’t come cheap, the technology is getting cheaper all the time. In fact, you may be able to find safety products coming to market that your insurer has yet to deem eligible. Run it by them before a purchase and see what happens.
Seven: Earn A Good Credit Score.
Right or wrong, many companies look at credit reports to determine pricing for both home and auto insurance because, statistically, there is a correlation between strong credit/low risk and weak credit/high risk. If you have any high-interest debt, work to eliminate it as soon as possible. Don’t miss payments. Don’t take on too much in loans. All of these moves can improve your standing.
Eight: Stay Put.
People shop less for insurance products as they get older because they feel comfortable where they are, and it is less likely to be cost- or time-beneficial moving everything to a new provider. USA.gov adds: “If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more.”
Nine: Review Coverage Limits.
Coverage limits change over time. Keep in mind that homeowners insurance typically covers the house, its contents, and any other possessions affixed to the property. As your amount of possessions fluctuate, so, too, will your coverage limits. If you’ve tried to reduce the amount of your belongings, then it may be worth considering an adjustment.
Ten: Buy Less House.
When you’re looking for a home, there is a temptation to get blinded by the payment itself and not realize until jumping into the heart of the deal that homeowners insurance isn’t included. Once you do add insurance, that can add $100 or more to the monthly payment. By buying a house that is the size you need and can afford WITH homeowners insurance attached, you can also reduce what you’re paying in premiums.
Just as homes are the most valuable investment that many ever make, homeowners insurance is probably the most valuable insurance product out there, simply because it protects your large investment from the unpredictability of life. By adhering to the tips above you can ensure that it remains affordable throughout the life of ownership.