Your home is likely the biggest investment you will ever make. More than your car or anything else, it’s the one thing you want to make sure is adequately insured.
But that doesn’t mean you have to overpay for that insurance. There are many ways you can potentially reduce your homeowners insurance costs:
1. Discounts
A very partial list of discounts various insurance companies offer on homeowners insurance would include:
* Loyalty discount
Stick with the same company long enough and they may be willing to cut your rates.
* Same company discount
Buy your homeowners insurance from the same company where you have an auto insurance or other policy, and you may get a package deal discount.
* Senior discount
Some companies offer age-based discounts due to the fact that retired people are more likely to be home a higher percentage of the time, and when people are home, burglaries are less likely and fires are spotted sooner.
* Home safety discounts
If you improve your home so that it is less likely to sustain storm damage, less likely to be destroyed by fire, less likely to be burglarized, etc., inform your insurance company and see how much they will lower your rates since your home is now less of a risk.
2. Shop different companies
Check with friends and family, an insurance agent, the local yellow pages, or the National Association of Insurance Commissioners (NAIC) to learn more about what companies in your area offer homeowners insurance, and shop around.
3. Don’t overinsure
If you bought land with a house on it, and a disaster that would damage or destroy the house would not destroy the land itself, don’t factor in the cost of the land as part of what you need to insure.
Also review your insurance policy regularly to make sure it still matches the value of your house and possessions as they go up or down. You don’t want a $700,000 policy if your insured house and possessions are now worth $200,000 (or $2,000,000).
4. Keep your credit score high
One of the factors an insurance company uses to determine your premium is your credit rating. So stay on top of that by paying your bills on time and checking your credit report regularly for mistakes to make sure you maintain a high score.
5. Choose a higher deductible
Your premium will be lower, maybe a lot lower, if you choose a policy with a higher deductible. As long as you don’t make it for more than you can absorb in the case of a disaster, you’re almost always better off with the higher deductible and the lower premium.
Choosing the right homeowners insurance at the right cost is worth a little extra effort and research.
Sources:
“12 Ways to Lower Your Homeowners Insurance Costs”
“Tips to Buying Homeowner Insurance”