Home insurance is essential for all homeowners, whether you have a mortgage or own your home.
Repairs and damage to a home can be surprisingly expensive, and homeowners insurance can cover most of the costs associated with injury. Of course, this depends on the type of damage and the type of coverage included in the policy. If a leaky pipe breaks your ceiling or a tree on your roof falls during a hurricane, this coverage will give you peace of mind.
But just because homeowners insurance is essential doesn’t mean you have to pay too much.
Ways to Save Money on Your Policy
The home insurance industry is not as competitive as the auto insurance industry. So you have to work a little harder to keep costs down, but it’s worth it, especially if you’re not self-employed.
Here are some simple and easy ways to get started right away.
1. Increase your deductible
A deductible is the amount of money an insurance company must pay before taking on claims under an insurance policy. The higher the deductible, the more you save on your premium.
Most insurance companies recommend a minimum deductible of $500. If you can increase your deductible to $1,000, you can save up to 25%.
2. Check your options
Talk to several insurance companies to find out what benefits they offer and get to know the current customers of the companies you are considering. Check the company’s financial strength you’re considering by using a rating agency such as A.M. Best or Standard & Poor.
Look for insurance quotes on the Internet, but don’t base your decision on price alone. Once you’ve narrowed your choice to three companies, get quotes.
3. New is better
Insurance companies really like new homes. They are less prone to electrical, heating, and plumbing problems. Plus, the structure itself is in better shape. Insurance companies offer 8 to 15 percent discounts if the house is new.
4. Drop small debts
It’s tempting to claim from the insurance company for even relatively minor accidents, but it’s better to pay those small claims out of your own pocket in the long run. In fact, some insurers offer discounts if you don’t claim for a certain period (usually several years).
How will a claim affect my rates? Wind damage claims increase annual premiums by an average of nearly 10%.
5. Create a credit history
You may be surprised to learn that your credit score can significantly impact your insurance premiums. That’s because, in most states, companies can use your credit score to determine insurance premiums. If an insurer considers your credit score too low (for example, a FICO score below 630), you may pay higher rates.
If you think your credit score is low, read your credit history carefully to identify errors. You can improve your credit score, for example, by paying your bills on time and reducing your credit card balances. Learn more about how to improve your credit score.
6. Group discounts
Some insurances companies offer discounts to specific professional and alumni associations. If you are a member of one of these associations, ask the association’s office if an insurer provides discounts for members.
7. Don’t jump from one place to another
Use that insurer if you have a long-standing relationship with an insurer and like it. Some insurers automatically offer discounts to policyholders who have been with them for many years. For example, 5% for three or more years of experience, 10% for five or more years of experience, etc.
Final Comment
The amount you pay for homeowners insurance can vary by several hundred dollars depending on the size of the home and the insurance company. From buying to upgrading, here are some ways to save money while protecting your home and belongings.
Author Bio
Lily Poole is a Property and Home Insurance Broker NYC by profession. She is pretty well experienced in the insurance and accounting field and has an impressive profile in the training and development industry.
