The price of homeowners insurance can vary greatly depending on the insurance company you purchase your policy from. Here are some tips to consider when buying homeowners insurance that can help you save big.
1) Shop Around
Do your homework to find the homeowners insurance that works for you. The National Association of Insurance Commissioners has information to help you choose an insurer in your state. You can get an idea of price ranges and see who has the lowest prices by checking consumer guides, insurance agents, companies, and online insurance quote services. Independent agencies like ours makes our clients lives easier by gathering quotes from multiple carriers to find you the best price for your home insurance needs.
2) Raise Your Deductible
Deductibles are the amount of money you have to pay toward a loss before you insurance company starts to pay a claim, according to the terms of your policy. So, the higher your deductible, the more money you can save on your premiums. If you can afford to raise a $500 deductible to be $1,000, then you may save as much as 25 percent of your premium.
Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage, such as hail, flood, earthquake, or tornado damage.
3) Don’t Confuse What You Paid for Your House with Rebuilding Costs
If you include the land under your house in your home’s value when deciding how much homeowners insurance to buy, you could pay a much higher premium than you should. Remember that the land your house sits on isn’t at risk from theft or storm damage.
4) Buy Your Home and Auto Policies from the Same Insurer
Companies that sell home, auto, and liability coverage may take a discount off of your premium if you buy two or more policies from them. Be sure to double check that the combined price you’ll pay is actually lower than buying your coverages through different companies.
5) Make Your Home More Disaster Resistant
Research what steps you can take to help make your home more weather resistant. Here are some ways to be proactive in protecting your home from severe weather and save on your premium:
- Adding storm shutters and storm doors
- Adding a protective coating to your exterior paint, wood, and roof to protect from leaks and mold
- In heatwaves, keep your foundation safe from damage by keeping the moisture content in your soil consistent.
- Keep trees and branches that are near your home trimmed back
There are so many ways to make your home ready for severe weather that can help you save on your insurance premiums in the long run. Running normal maintenance checks on your home will help you to stay informed on the status of your house and help save you from having to pay for extensive damage.
6) Improve Your Home Security
You could potentially save on your home insurance by installing a smoke detector, burglar alarm, dead-bolt locks, a sophisticated sprinkler system, or fire or other monitoring systems. These types of installations aren’t cheap, so be sure to check with your insurance provider to see if they offer these discounts before going forward with any of these projects. Your insurer may also have recommendations regarding these systems that could help you save money on the installation as well as on your insurance premiums.
7) Seek Out Discounts
Many companies offer discounts, but not all of them offer the same discount or the same amount of discount in every state. There could be discounts for age, for example in some companies ones you’re 55 years old or retired, you could receive a discount of up to 10 percent on your insurance. Check with your employer and professional associations to see if they potentially administer group insurance programs that could have a better deal than what you can get elsewhere.
8) Maintain a Good Credit Record
Your credit rating effects your insurance rates. Most people are unaware that insurance companies pull credit ratings when pricing their policies. Maintain a good rating by continuing to pay your bills on time, don’t take on more credit than you need, keep your credit balances as low as possible, and check your record frequently and correct any errors quickly so your credit rating remains accurate.
Our blog post about Credit Rating and its effect on Insurance Rates goes much more in depth on this subject. If you would like to learn more we highly suggest you go on over to that blog post.
9) Stay with the Same Insurer
Once you find a coverage that works for you and that you’re happy with, look to stay with them. Many companies have loyalty discounts and offers that get put in place once you have been with a company for a certain number of years. The longer you are with a company, the more you may save in the long run.
10) Review Your Policy and the Value of Your Possessions at least Once a Year
Whenever you make a major purchase or complete an addition to your home that could potential increase in value, you want to make sure your policy reflects these changes. You also want to review your policy for the reverse. If the value of your home decreases, then you want to decrease the amount of insurance you’re paying for. This will help your policy stay accurate and make sure you aren’t potentially overpaying for your coverage.
11) When You’re Buying a Home, Consider the Cost of Homeowners Insurance
Where you buy your home can affect how much you pay for your homeowners insurance. Purchasing a home that is close to a fire hydrant or in a community with a professional instead of a volunteer fire department can help keep your cost down. You could also research natural disasters the area that your buying in is prone to and buy a home accordingly. Also, you can save on your insurance by purchasing a home where the plumbing, heating, and electrical are all less that 10 years old.
Insurance Information Institute
National Association of Insurance Commissioners
Arkansas Insurance Department (PDF)