Owning a home provides stability and a sense of security. Plus, it’s typically a solid financial investment. But there’s much more to the cost of owning a home than the real estate price tag. Homeowners have upkeep and maintenance costs, annual homeowner’s association dues, and the cost of insurance.
Those expenses can add up fast, so most homeowners are eager to find ways to save on the cost of homeownership. One way is to reduce your homeowner’s insurance premium. You may think insurance costs are set with no room for negotiation or discounts. In fact, there are ways you can save on homeowners insurance.
- Choose a higher deductible. Typically you’ll only file an insurance claim if there’s a major disaster, such as a fire or damage from high winds. So don’t worry about having a deductible that’s less than $1,000 – especially if you can afford to pay for any cheaper claims out of pocket. The higher the deducible the cheaper your homeowners insurance premium.
- Bundle your insurance. Many companies will offer discounts to customers who have multiple insurance products. If possible, bundle your home and auto insurance with the same company. And if you’re planning to purchase an additional flood insurance policy, bundle it in as well if your company offers it.
- Ask for security and home improvement discounts. Insurance companies certainly prefer when fewer people file claims, so another good way to lower your homeowners’ insurance premium is to do everything you can to keep from filing a claim. Adding a home security system, hard-wired smoke detectors and deadbolts can all result in a cheaper premium. Also if you’ve recently upgraded your plumbing and electrical systems, ask for a discount. New plumbing, for example, means less risk of filing a claim for busted pipes and water damage.
- Be a good customer. Sometimes it seems companies only offer the best deals to new customers, and loyalty is overlooked. But there are some insurance companies that reward customer loyalty. Ask if your company has such a policy and reap the rewards.
- Eliminate unnecessary coverage. Is your policy too big, too small or just right? Make sure you understand the ins and outs of your policy. It should be enough to replace your home and its contents. If you have an older house or don’t own a lot of fine jewelry and expensive artwork, you might need less coverage. It’s best to sit down with an agent to discuss your individual situation.
- Improve your credit score. Similar to how auto insurers will use your credit score when setting premiums, companies will do the same for homeowners insurance. Customers with low credit scores are seen as high-risk and therefore pay higher premiums. Take steps toward increasing your credit score so you can decrease your homeowners insurance premium.
- Consider the added costs of items like pools and trampolines. Having risky backyard toys like trampolines, tree houses and swimming pools can increase your insurance premiums as they are seen as big liabilities. You also need to ensure your policy covers incidents related to items like this. If your kids have outgrown the trampoline or your family rarely uses the pool, you might want to get rid of them and lower your insurance costs.
- Shop around. There’s nothing wrong with looking around for a better deal. Periodically get quotes from other companies and see if a cheaper policy exists. Just make sure you’re comparing the same policy and factoring in any current discounts. You want to compare apples to apples when it comes to coverage and pricing.
Don’t assume your homeowners’ insurance premiums are set in stone. Ask for discounts and look for ways to reduce your costs. You can always put that extra money toward the never-ending list of home improvements.
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