If you own a home, you want to protect it by taking out an insurance policy. While your insurance costs may be a necessary expense, there is no reason to pay the highest prices. Not all insurance companies are created equally, so it’s essential to know all of your options to find the best coverage.
There are many factors that are considered in the calculation of your insurance premiums. Your insurance company will assess the risks of your home and property and quote you an estimate on your insurance costs. There are several actions that you can take to reduce your costs and still get the best protection.
From shopping around for several home insurance quotes to upgrading your home security system, there are many ways to save on your premiums. Let’s take a closer look at a few ways to lower your home insurance costs.
Raise Your Deductible
Your deductible amount is the cost that you are obligated to pay out of your pocket to fix damage to your home prior to your coverage kicking in. Most homeowners believe that keeping a lower deductible will save them money, but that’s not the truth.
On average, most policyholders set their deductible at $500. This is a generally affordable amount to have to pay. However, if you can afford to bump your deductible up to $1,000, you can save up to 25% on your premium costs. If you don’t have to make a claim on your insurance, you will save a bundle throughout the year. Keep in mind, if you raise your deductible, it’s a good idea to set that amount aside in your emergency fund so that you will have it available when needed.
Improve Your Home Security
When the insurance company considers where to set your premiums, they are trying to manage the risk of the probability of having to pay a claim. If you can upgrade your home security, you are reducing the risk and will likely end up paying cheaper premiums. Ensuring that you have fire alarms in all rooms, upgrading your locks, and installing a monitored security system can help you to bring down your insurance premiums.
Shop Around
Every insurance company is different and will offer different rates. If you are buying a home, you need to do your research into finding the most affordable coverage that suits your needs. You can start with an online search and check out a few companies. It’s a good idea to go beyond comparing bottom-line prices. Each policy will offer different coverage so it’s important to know what is included in the policies. Once you have settled on the type of coverage that you need, request quotes and use them to compare prices.
Consider Rebuilding Costs
If your home is destroyed by fire or other means, you will have to make a claim on your insurance policy for rebuilding costs. When you take out your policy, you will be asked to estimate this cost. It’s important to remember that the higher you set your replacement costs, the more you will pay for your monthly premiums.
It’s important to know that the purchase price of your home is not the same as your replacement costs. The land that your home is on cannot be destroyed but will account for a portion of the price that you pay for your home. For example, if your home sits on several acres, you will pay a price that combines the cost of the land and the cost of your home. When you file a claim for rebuilding your home, you need to only consider the actual costs of building your house structure. Setting a rebuilding price that only accounts for home construction can help to keep your premiums down.
Disaster Proofing
You never know when disaster can strike. It may come in the form of a severe hail storm, a tornado, a hurricane, or a wildfire, and the lengths that you go to protect your home can be crucial to your home’s protection. Upgrading to a steel roof that will protect your home from fire embers or adding hurricane-proof windows can help you to minimize your disaster damage and reduce your premiums.
Ask About Discounts
Most insurance companies do not advertise the discounts that they offer. It will be up to you to make a request about any savings for which you qualify. Common insurance discounts include:
- Loyalty discount
- Military discount
- Senior discount
- Safe driving discount
- Defensive driving course discount
- Multiple policy discount
Bundle Your Policies
Taking out your auto and life insurance with the same company that holds your home policy can save you on your premiums. Insurance companies would prefer to hold all of your policies and are willing to hand out considerable discounts for bundling your policies. You could save up to 25% on your insurance costs when you bundle your policies with one insurance provider.
Annual Review
Over time, your insurance needs will change. It’s a good idea to review your home policy annually to determine whether it is still meeting your needs. You may have a number of riders added to your policy to protect your special belongings; a review could save you money on your premiums if they are still needed. You will need to consider if you are getting the right price with your current provider or if you should start shopping around for a new policy.
Home insurance is an essential expense that homeowners can’t avoid. If you want to get the best protection at the most affordable cost, you need to follow these tips to save you on your home insurance costs.
