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Savvy Ways to Save on Homeowner’s Insurance

HH11.1vers2Have you evaluated your homeowner’s insurance lately? If not, you just might be paying for more coverage than you actually need.

It’s always a good idea to reassess your needs and any changes in your home that could affect your insurance rates. Don’t ever just “rubber stamp” your policy since how you live in your home and what possessions you own can change from year to year. While you are at it, make sure you are fully covered for things that might come up as well—maybe take your savings and put it towards additional coverage you need now.

So before you renew, take the time to review the list below to find ways to lower the cost of your homeowner’s insurance.

Be a Smart Consumer

  • Shop around. Quotes on homeowner’s insurance can vary by hundreds of dollars for the same coverage on the same home. Get at least three quotes and make sure each insurer is offering the same coverage. And that includes shopping with your current insurer — sometimes you can even save money by buying a completely new policy from them.
  • Buy home and auto policies from the same insurer. Some companies that sell homeowners, auto and liability coverage will take 5 to 15% off your premium if you buy two or more policies from them.
  • Stay with the same insurer. If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5% if you stay with them for three to five years and by 10% if you remain a policyholder for six years or more.

BUT … don’t get lulled into thinking it’s always a good deal so you should periodically compare this price with that of other insurers (and remember even shop for a new policy with your current insurer!)

  • Look into group membership discounts. Are you an AAA member, in the military or belong to an alumni organization? You may be eligible for membership discounts with your insurance company. It’s worth asking about any discounts when renewing. It can be a benefit of being a member in a professional group, a trade organization, or a non-profit association.
  • Maintain a good credit record. Insurers are increasingly using credit information to price homeowner insurance policies. Having a higher credit score could save you money on insurance.
  • Pay your annual premium upfront. Ask your company if they will give you a discount if you pay the entire annual premium upfront. If you can’t do that, some companies may also give you a discount if you pay monthly installments electronically.

Know Your Needs

  • Review the value of your possessions. You want your policy to cover any major purchases or additions to your home. But some items depreciate over time so review your policy annually so you don’t have too much coverage. Don’t forget to review the riders you may have for special items such as jewelry, artwork, electronics, or other high dollar items and make sure you have the right coverage.
  • Raise your deductible. If you can afford to raise your deductible to $1,000 from $500, you may save as much as 25% on your annual premium. Most experts say that homeowners should set their deductibles between 0.5 and 1% of the home’s value. Remember, you’ll need to cover this higher deductible if you make a claim – so make sure you have enough savings in the bank!
  • Don’t insure the land. Homes can be damaged in fires, floods, and other mishaps, but there’s not much that can go wrong with land. Purchase enough insurance to rebuild your home, and not the price you paid for it. Don’t confuse the price you paid for your home with the cost of rebuilding it. The land under your home usually isn’t at risk so it doesn’t need to be insured.

Make Improvements

  • Enhance your home’s security and safety. By making some small changes you can get a discount, such as installing a smoke detector, fire extinguisher or dead-bolt locks. You could get a larger discount for more expensive upgrades, such as a sprinkler system for fire safety, or a sophisticated alert system that has a direct line to police or fire stations. Even Smart Home devices, such as a thermostat could be considered for a discount since it could help prevent frozen pipes. Ask you insurer about any products or services that may qualify.
  • Upgrade older features. If you have an older home update your plumbing, electrical and heating and/or air conditioning systems to prevent fire or unwanted leaks. Your home will be considered less risky, which can reduce your rates. Also talk to your agent to find out if there are other upgrades you should consider.
  • Look into water and gas leak sensors. Insurance companies may lower your bill because these devices help prevent claims since you’ll know there’s a problem before there’s major damage. Home sensors can alert you if there is moisture or a gas leak in your home. Active water detectors can even shut off the water source!
  • Give up smoking. This improvement is for you and your health but it can lower your insurance cost. Smokers are at an increased risk of fire-related claims. If you smoke, and are serious about lowering your bill, consider quitting. If you were a smoker when you took out the policy but have recently quit let your insurer know.

Don’t Forget Other Factors

  • Reconsider pool or hot tub. These may or may not impact your premium depending on where you live so talk to your agent before you get one. If you already have one, discuss the measures (i.e., gate) necessary to decrease any risk.
  • Take your dog to obedience training. Certain breeds will either cause your insurance company to cancel coverage or increase your insurance rate. So you might want to find out which breeds affect insurance rates before you get a dog. If your dog attends obedience training, let your agent know and it can mitigate any increases.

Please check with your licensed insurance provider to see what is best for your particular situation. Our tips should not be seen as insurance advice, just food for thought and a helpful list of items to run by your licensed insurance provider.