How to save on homeowners insurance
11 tips to lower home insurance premiums and save money
All insurance companies prefer low-risk clients. Providers reward your actions that reduce risk with a discounted rate. If you already have insurance with another company, check to see if you can get a multipolicy discount by bundling your home insurance. Keep reading for more tips.
11 ways to save on homeowners insurance
1. Shop around for policies
When comparing quotes, you might be surprised to find a significant difference between prices and options. Shop around with a variety of insurers to find the best package for your budget, but make sure you don’t skimp on coverage in the name of a lower price. With almost any major purchasing decision, comparing quotes from multiple companies is a good way to start.
2. Install a security system
Installing a home security system is a great way to qualify for a discount. Some insurers may require the system to be monitored by a professional monitoring company, while others are OK with simple video surveillance. If you have already installed an alarm system, make sure you choose a provider that offers a discount for it. If you don’t have a home security system already, consider buying one for a rate discount and additional security.
3. Improve your credit score
Your credit score often plays a role in the cost of your premiums. An insurance company uses your credit score to make an educated guess about how likely you are to make a claim. If you have a high credit score, you’ll receive better quotes.
Consider working with a credit repair company if your credit score is low for reasons that aren’t your fault, such as identity theft. Make sure that you don’t open a new credit account during the homebuying process — that can impact your credit score when you need it to be the highest.
4. Bundle policies
Bundling policies can save you a decent chunk of change on your premium. It can also help streamline your claims process and insurance proceedings. Juggling multiple insurance policies throughout the year can make it more difficult to budget and stay on top of payments. Bundling your insurance policies can be a great way to save time and money and prevent headaches throughout the year.
5. Make safety improvements around the house
Certain safety improvements, like fire alarm systems, can show your insurance company that you take prevention seriously. Because adequate safety measures can make a world of difference in terms of overall damage, you may qualify for a discount when you make improvements. Some examples include installing storm shutters and sprinkler systems for fire suppression. Read about how to find the best home improvement contractors to learn more.
6. Ask about other discounts
Home insurance providers offer many discounts to policyholders. When comparing insurers, be sure to compare the discounts they offer. Some common deals include those for bundling policies, home security systems, new appliances, loyalty discounts, home improvements and nonsmokers. There may be savings for military personnel or seniors as well.
7. Raise your deductible
The higher your deductible, the lower your premium. A deductible is how much you pay before your insurer starts paying out a claim, so your premium changes when you raise and lower your deductible amount. While we don’t recommend maxing out your deductible, we do think you should find that sweet spot where you can comfortably pay out a deductible while still saving money on your premium. According to the Insurance Information Institute, home insurance deductibles apply each time you file a property damage claim in most states. However, there generally isn’t a deductible for the liability portion of a policy.
8. Pay off your mortgage
The requirements for homeowners insurance usually go away when you pay off your mortgage loan in full. First, check to confirm that you don’t owe any residual costs, such as escrow fees, and remove your lender’s name from the policy. You could adjust your policy to save money or drop coverage together if you want. For most homeowners, their house is their largest asset and more significant investment, so it makes sense to maintain a homeowners insurance policy for financial protection.
9. Replace your roof
Getting a new, impact-resistant roof may be expensive, but it might also get you a discount on home insurance. Make sure to check what type of roofing or material qualifies for a discount before you pay for service. Read about what to look for when selecting a roof shingle brand to learn more.
10. Review coverage each year
Your needs may change over time, meaning your coverage should as well. For example, if you used to have precious jewelry coverage but recently bought a safe, you may consider canceling that part of your coverage. Looking at your policy lets you be sure you’re only paying for the level of coverage you need at the time.
Just like any other type of insurance, you have the right to change your coverage and provider at any time. You may have to pay a penalty for canceling coverage before time is up, though.
11. Stay with the same insurer
Many providers offer a loyalty discount that lowers premiums the longer you stay with them. While it’s a good idea to compare premiums every year or so, you should also consider what discounts you’re missing if you don’t stay with the same provider. Most of these loyalty discounts don’t kick in until at least the third year of service.
Home insurance savings FAQ
- Is house insurance cheaper without a mortgage?
- Lenders require that homeowners carry a specific level of coverage. After you pay off your mortgage, you can adjust your coverage level, which could lower your insurance premiums. However, premiums don't automatically get cheaper just because you pay a mortgage off.
- Why is my homeowners insurance so high?
- Your home insurance might be expensive because of your location. For instance, If you live in a high-crime area or an area known for flooding, your premium will be more expensive. Other factors that impact home insurance cost include the age of your home, what’s included in your policy, your deductible amount and not taking any advantage of discounts. High-risk home features, including pools, can also raise your premium.
- Do security cameras lower insurance?
- Sometimes, installing security cameras can lower your insurance premiums. Many providers offer discounts for homeowners who install security systems and cameras around their house. This can be an excellent way to save on your premium while also safeguarding your assets.
- Will a new roof lower my insurance premium?
- A new roof will usually lower your insurance premium. Basically, this signals to your home insurance company that you are less likely to make a claim on your roof, which is why providers offer discounts for these types of repairs.
- Does having a safe reduce home insurance?
- Having a safe does not automatically reduce your homeowners insurance. However, if you have a safe, you might not need to buy additional coverage for your personal belongings, which will reduce the cost of your overall policy.
- Is homeowners insurance negotiable?
- No, homeowners insurance premiums aren’t usually negotiable, but coverage levels are somewhat flexible. This means you can adjust your policy and deductible levels to get a cheaper rate.
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