What Are the Ways to Lower Homeowners Insurance Costs?
Looking to reduce your homeowner’s insurance costs? While it may not be a topic that receives much attention, it’s worth exploring ways to save on your premiums. Thankfully, insurance providers offer several discounts and incentives that can help lower your homeowner’s insurance expenses. Consider the following nine methods to save money:
Increase Your Deductible
Consider adjusting your deductible if you want to lower your homeowner’s insurance costs. By increasing the amount you would pay out of pocket in the event of a claim, you can potentially reduce your premium. According to NerdWallet’s rate analysis, raising your deductible from $1,000 to $2,500 could result in an average savings of 11% per year.
Opting for a higher deductible allows you to keep more money in your pocket each month that would have otherwise gone to your insurer. However, evaluating whether the potential discount justifies the increased out-of-pocket expense is essential. Ensure you have sufficient savings if you need to make a claim and cover a larger portion of the cost.
SEE ALSO: Is Power Outage Covered by Home Insurance?
Make Your Home More Secure
If you’re seeking ways to lower your homeowner’s insurance costs, even implementing basic home security measures can make a difference. According to Mark Friedlander, spokesperson for the Insurance Information Institute, having essential safety features can lead to discounts on your premium.
Installing a smoke detector, burglar alarm, or deadbolt locks in your home can potentially earn you a 5% discount. Taking it a step further, incorporating a comprehensive sprinkler system and actively monitored fire and burglar alarms may result in even more substantial savings, ranging from 15% to 20%.
By prioritizing home security and investing in these preventive measures, you not only enhance the safety of your property but also have the opportunity to reduce your homeowner’s insurance expenses.
Skip Small Claims
When aiming to lower your homeowner’s insurance costs, it’s crucial to consider the impact of filing claims, even for minor incidents. While seeking coverage for every little expense may be tempting, paying out of pocket for smaller damages can be more advantageous in the long run. In fact, some insurers offer discounts to policyholders who maintain a claim-free record for a specified period, typically a few years.
Wondering how filing a claim can affect your rates? According to a recent analysis by NerdWallet, submitting a claim for wind damage, for instance, can lead to an average increase of about 9% in your annual insurance cost. If the damage is relatively minor, the cumulative rate increases over time and might surpass the amount the insurer would have paid for your claim.
By carefully evaluating the situation and considering the long-term financial implications, you can decide whether to file a claim or handle more minor expenses out of pocket. This approach can potentially help you save on your homeowner’s insurance premiums.
Ask About Lesser-known Discounts
Exploring potential ways to lower your homeowner’s insurance costs requires careful consideration of available discounts. It’s important to proactively inquire about additional savings for which you may be eligible. Some insurers offer extra discounts on homeowners insurance if you meet specific criteria, such as:
- Smoke-free household: If no smokers live in your house, you may qualify for a discount.
- Recent home purchase: Some insurers provide special discounts if you have recently bought your home.
- Automatic bank payments: Opting for automatic premium payments through your bank may make you eligible for additional savings.
- Paperless billing: Choosing paperless billing methods can lead to potential discounts from insurers.
- Occupation-related discounts: Certain careers, such as teaching, engineering, or firefighting, may entitle you to specific homeowners insurance discounts.
By actively exploring these options and discussing them with your insurance provider, you can uncover potential savings that you may be entitled to based on your circumstances. Taking advantage of these discounts can help you lower your homeowner’s insurance costs.
Account For Home Improvements
When it comes to lowering homeowners insurance costs, it’s essential to consider how home improvements can make you eligible for valuable discounts. By enhancing certain aspects of your home, you may qualify for insurance savings, even without being aware of it. Incorporating features like storm shutters and impact-resistant roofing, which increase the durability of your house, can potentially lead to reduced insurance premiums. Upgrading outdated plumbing and electrical systems might also make you eligible for discounts.
To maximize your potential discounts, Jessica Hanna, the American Property Casualty Insurance Association spokesperson, suggests requesting a new home inspection. This evaluation considers your improvements, ensuring that you receive the full benefits of any potential discounts.
By proactively identifying and highlighting the enhancements you have made to your home, you can leverage these improvements to lower your homeowner’s insurance costs potentially. Don’t hesitate to contact your insurance provider to explore the possibility of a new inspection and discuss the available discounts based on your home’s upgrades.
Bundle Your Auto And Home Insurance
Another effective way to reduce your homeowner’s insurance costs is by bundling your auto and home insurance with the same company. According to data from the Insurance Information Institute, this bundling strategy typically saves you between 5% and 15% on your homeowner’s premium. While the exact discount may vary depending on your chosen insurance company, many insurers offer attractive discounts when you purchase multiple policies from them.
Consider exploring the best home and auto insurance bundles available to take advantage of this cost-saving opportunity. By consolidating your insurance policies with a single provider, you can simplify your coverage and enjoy significant savings on your homeowner’s insurance premium.
Remember to compare different insurance providers and their bundled offerings to ensure you find the best deal that meets your specific needs. Researching and comparing options can help you secure the most favorable rates while benefiting from the convenience and potential discounts of bundling your home and auto insurance policies.
Build Your Credit Score
When it comes to lowering homeowners insurance costs, it’s important to recognize the significant impact that your credit score can have. In many states, insurance companies utilize a credit-based insurance score to determine the rates you are offered. If your credit score falls below a certain threshold, such as a FICO score below 630, it could result in higher insurance premiums.
According to NerdWallet’s rate analysis, individuals with poor credit scores typically pay an average of 94% more for homeowners insurance than those with good credit scores.
If you discover that your credit score is low, it is crucial to carefully review your credit report to identify any errors that may negatively impact your score. Taking steps to improve your credit score can lead to potential savings on your insurance premiums. This includes making timely loan payments, reducing credit card balances, and adopting responsible credit management practices.
By proactively addressing your credit score, you can work towards building a stronger financial profile, potentially resulting in lower homeowners insurance costs. To learn more about improving your credit, explore resources and guidance on how to build and maintain a favorable credit standing.
Get Rid Of High-risk Stuff
Lowering homeowners insurance costs involves being aware of potential factors that can impact your premiums, such as having what insurers classify as an “attractive nuisance” on your property. Attractive nuisances refer to features like trampolines, swimming pools, or playground equipment that may entice children to play on them. However, you could be held legally responsible if a child gets injured while engaging with these items. Due to the liability risk involved, owning such items can increase homeowners’ insurance premiums.
To save money on your insurance, it is advisable to consider removing or securing attractive nuisances that pose potential risks. By eliminating these features from your property, you mitigate liability concerns and may qualify for reduced insurance premiums. Taking this proactive step demonstrates your commitment to minimizing potential hazards and can lead to cost savings on your homeowner’s insurance.
Shop Around
Lowering homeowners insurance costs is possible by recognizing that rates can significantly differ among insurance companies, even for identical coverage. According to NerdWallet research, homeowners have the potential to save $1,000 or more annually by finding the most affordable rate.
To explore your options, numerous insurance companies provide tools on their websites where you can input basic information and receive instant home insurance quotes. By comparing rates from different companies, you can determine if switching insurers could lead to savings. Additionally, seeking the assistance of an independent insurance agent or broker can be beneficial. They have the expertise to shop around on your behalf, considering multiple insurers and finding the best available rates.
By actively comparing rates and exploring different options, you increase your chances of securing a more cost-effective homeowners insurance policy.
Final Thoughts
In conclusion, it is important to avoid reducing coverage that may be necessary in the event of a disaster. Cutting back on coverage can leave you financially responsible for rebuilding your home and replacing lost belongings in the unfortunate event of a catastrophe.
Additionally, it is advisable to retain other essential policies, such as a flood insurance policy from the National Flood Insurance Program, if applicable to your location. However, it is worth exploring alternative options by obtaining quotes from private flood insurance companies. This proactive approach may lead to discovering more affordable alternatives that still provide adequate coverage.
By maintaining appropriate coverage and exploring different insurance options, you can strike a balance between cost-saving measures and ensuring you have the necessary protection in place to safeguard your home and belongings.
