Despite the fact that homeowners insurance receives little attention, it can cost you more money than it needs to. The good news is that insurers provide a range of discounts and incentives that might help you lower your home’s insurance rate.
Table of Contents
- 1. Raise Your Deductible
- 2. Package Your Home & Auto Policies Together
- 3. Don’t File a Small Claim
- 4. Insure for Replacement Cost Instead of Market Value
- 5. Improve Your Home Security by Installing Safety Devices
- 6. Pay Annually Instead of Monthly
- 7. Increase Your Credit Score
- 8. Get Rid of High-risk Stuff
- 9. Shop Around
- 10. Stay with the Same Insurer
- Final Thought
1. Raise Your Deductible
One of the most effective ways to lower your homeowner’s insurance costs is to raise your deductible. By increasing your deductible from $500 to $1,000, you could save as much as 25% on your annual premium. Just make sure you have enough money saved up to cover the increased deductible in the event that you must file a claim.
2. Package Your Home & Auto Policies Together
If you have both a home and auto insurance policy, see if your insurer offers a discount for bundling the two together. In many cases, you can save up to 15% on your overall premium by packaging your policies together.
3. Don’t File a Small Claim
While it may be tempting to file a small claim for a broken window or damaged fence, doing so can actually end up costing you more in the long run. That’s because most insurers will raise your rates after you file a claim – even if it’s just a small one.
4. Insure for Replacement Cost Instead of Market Value
When insuring your home, be sure to insure it for its replacement cost rather than its market value. The replacement cost is the amount it would cost to rebuild your home from scratch in the event of a total loss. The market value is the current worth of your home, taking into account things like location and age. In this way, it’ll help you save a lot on your premium.
5. Improve Your Home Security by Installing Safety Devices
Installing safety devices in your home – such as smoke detectors, fire extinguishers, and deadbolts – can also help you lower your home insurance costs. That’s because these devices help to make your home safer and less likely to experience a loss. As a result, your insurer will be less likely to have to pay out on a claim.
6. Pay Annually Instead of Monthly
If you can afford to do so, consider paying your home insurance premium in one lump sum each year. Many insurers offer a discount for policyholders who do this, and it can save you a significant amount of money over the course of the year.
7. Increase Your Credit Score
Your credit score is one of the most important factors that insurers use to determine your premium. If you have a high credit score, you’re likely to get a lower rate than someone with a lower score. So if you’re looking to save on your home insurance, it’s worth taking steps to improve your credit score.
8. Get Rid of High-risk Stuff
If you have any expensive or high-risk items in your home – such as jewelry, firearms, or artwork – it’s likely that they’re driving up your premium. One way to lower your costs is to get rid of these items altogether. If you can’t bear to part with them, consider insuring them separately through a rider on your policy.
9. Shop Around
Don’t forget to shop around and compare rates from different insurers. Just because you’ve been with the same company for years doesn’t mean that they’re giving you the best deal. There’s a good chance that you can find a better rate elsewhere.
10. Stay with the Same Insurer
You may be qualified for a special discount if you’ve had your insurance with the same provider for a number of years. This is typically called a “loyalty discount” or a “continuous coverage discount.”
There are a number of things you can do to lower your home insurance costs. By raising your deductible, packaging your policies together, improving your home security, don’t file a small claim, insuring for replacement cost instead of market value, paying annually instead of monthly, increasing your credit score, getting rid of high-risk stuff, and staying with the same insurer, you can save a significant amount of money on your premium.
Just be sure to shop around and compare rates from different insurers before you make a decision.