In this article, we will be discussing the ways you can lower homeowners insurance costs. Owning a home is a great investment, but other unavoidable costs come with home insurance and repairs. Homeowners insurance policy ensures that you are covered in any disaster such as fire, theft, storms, and lightning strikes.
It might feel like it’s expensive, but know that you will be reimbursed in case of any destruction to your property, irrespective of how expensive it is worth the investment.
Furthermore, if you bought your home using a mortgage, you must take homeowners insurance.
How Much Should I Be Paying for Homeowners Insurance?
The amount of money you pay for a homeowners insurance policy depends on the following:
- Location of your home: If your home is located in disaster-prone area, your insurance premiums will be higher because you are under an increased risk of filling a claim.
- The age of your home: The older your home is, the more the insurance costs because you’ll need a lot of money to replace the electrical, heating, and plumbing system. But if your home is new, your insurance premium will be low.
- Contribution: The more money you put towards your premium, the higher the payout. So, consider carefully before deciding on the number of personal items you need to be covered.
- Safety Features: Your insurer will give you a specific discount if you have autofitted your home with safety features, such as burglar and fire alarms.
How do I lower homeowners insurance costs?
While owning a home is a good investment, you also need to know the different ways to reduce your home insurance costs.
- Do Your Research
Before buying any insurance policy, you must shop around and compare different insurers’ terms and conditions. It is widely known that before you are advanced a mortgage, you are required to take homeowners insurance, but your lender will never specify which insurance company to work with. It is your responsibility to research and settle for the insurer with the best terms.
Gathering policy quotes from different insurers is relatively easy as you only need to go online on portals such as visit Insure.com or InsuranceQuotes.com. This will give an insight into the company’s prices plus those with the lowest prices.
But don’t look at price alone; look for insurance companies with a strong rating from previous users and complaints. Compare a minimum of three companies and choose the best one.
Read Also: Homeowners Vs Renters Insurance: Everything You Need to Know
- Raise Your Deductibles
Deductibles refer to the amount of money you are required to pay towards a loss before your insurer starts to pay the claim as stated under your insurance policy. And the higher your deductible, the more money you can save on your insurance premiums. Most insurance companies recommend boosting your $500 premium to $1000, which will enable you to save as much as 25%.
When choosing your insurance premium, consider the costs of repairs and any other issue that prompts you to fill a claim. Ensure to keep them at a minimum to avoid hiking your premiums. With that said, ensure that you have a separate deductible if you live in disaster-prone areas. For instance, if you reside along the coast, it’s advisable to have a storm deductible. Always take out a deductible that is not higher than what you can afford to pay in cash.
- Take Advantage Of Discounts
Insurance companies offer various discounts to homeowners, especially when they pay their annual premiums in full upfront. Some offer discounts if you choose to take an insurance policy that lasts for more than three years.
For instance, some insurers offer older people who have retired homeowner insurance discounts of up to 10%. The most considerable discount offered can be up to 35%, which is granted to new construction owners. People who opt to combine their home and auto insurance policies can get up to a 19% discount.
Therefore, before taking out a homeowner insurance policy, talk to your insurance agent and get all the discounts you qualify for. And whenever you make an improvement or renovation in your home, you can renegotiate with your insurer as you may be eligible for a discount.
- Buy Home and Auto Insurance Policies From the Same Insurance Company
Take out your home and auto insurance from the company. This will save you about 5% to 15% on your homeowner’s premium. However, ensure that the combined costs of the two premiums are lower than buying the two coverages from two different companies.
Read Also: How to save big on auto insurance
- Reinforce Your Home Against Disasters
Suppose you safeguard your home against natural disasters or thefts by adding storm shutters, reinforcing the roof, and retrofitting your home with earthquake-resistant materials. In that case, it can reduce your premium costs. When you fortify your home, you reduce the risk of fire and water damage.
For instance, if you live in hurricane-prone regions, you can qualify for discounts if you make home improvements in your home. This can include adding water barriers such as barricading your roof deck, anchoring your roof, and hurricane-proof door and garage doors.
You can also use storm shutters and doors. Although the initial costs of making these improvements are high, they will be helpful in the long term as it lowers your insurance costs and makes your home safer.
Some insurance companies offer a certain discount to upgrade the electrical wiring, heating, and plumbing systems. The improvements help minimize the risk of destruction due to power surges or flooding to pipe breakage.
- Enhance Home Security
Ensuring that your home is burglary-proof saves you a certain amount of insurance costs. For instance, if you install smoke detectors and burglary alarms in your residence, your insurer may give you at least 5% discount on your premium.
And the discount may be hiked up to 15% -20% if you outfit your home with an advanced sprinkler system, fire, and burglar alarms that notify the police, fire department, or any other monitoring system of any irregularity in your home.
Autofiting your residence with these devices is not cheap, and some are not qualified for a discount, so before going to the trouble, consult with your insurer and find out which they recommend, the cost of installation, and how much you’ll save in premiums.
If you reside in areas prone to windstorms, ensure that you clear the bush and trim all the trees surrounding your house because the wind cause branch breakage, resulting in roof caving, widows braking, or some other significant damage.
- Good Credit Record
A good credit score and credit history can minimize your insurance costs. Insurance companies utilize your credit information when pricing homeowners insurance policies. So, track your credit record regularly, and if you notice it is going down, fix it immediately.
Read Also: How to fix your bad credit score
You can improve your credit score by paying your bills and debts on time. And ensure that you do not take more debt than you can handle and keep your credit balances at the lowest level possible.