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Reducing Homeowners Insurance Costs
In recent years, the cost of insuring homes has increased and still has a tendency to rise. There are a number of factors which contribute to this rise, including major catastrophes and smaller disasters like wildfires, tornados, tropical storms, hail, ice and snow. High costs tend to make some homeowners exert special efforts to keep their homes, and might turn purchasing Home Insurance into a disaster in its way. Before starting to read on how to survive this sort of disaster, examine your policy and look for ways how you can actually reduce the price of your coverage and still be adequately covered.
You can save on the cost of your Homeowners Insurance premiums in a variety of ways: from making use of different insurance companies' credits, or discounts from your state to increasing your deductible.
Insurance rates depend on the home location as well as the home construction. Each town is graded by the state or the insurance company according to the place's proximity to the closest fire department and fire hydrant, road accessibility, congestion, and other characteristics that usually influence the time which the fire department needs to quickly get to a house fire. Then, fire-resistant building materials ensure lower rates, and homes made of brick will obviously have lower rates than wood-frame buildings.
Read reviews of insurers, ask your friends and family members about the insurance company they chose, check with several insurance companies to get rate quotes. Quotes may vary greatly from insurer to insurer and having applied some time and effort to comparison, you are sure to find a lower premium for the same coverage. Insurance companies don't offer the same discount types or the same discount range in all states. You are recommended to get at least three quotes from different insurers and compare the policies.
You can get Home Insurance quotes by visiting an insurance broker's website online. These websites are normally owned by independent agents who deal with different insurance companies. By going to more than one broker's website, you will be able to get several quotes and compare them.
Consult with your Home Insurance Agent
Some insurance companies may offer discounts that other insurers do not. Ask your insurance agent about discounts which are available and see if you qualify or could qualify for them in future. For example, some insurers may offer single parent discounts, military service, 55 and retired, non smoking, law enforcement, discounts for homes that are less than 15 years old, multiple-policy discounts (e.g. if you purchase Homeowners and Auto Insurance from the same company) etc.
Some states may offer credits in partnership with insurance companies. Find out if your state belongs to them.
Before you decide to carry more than one policy with one insurance company, compare and see if this company really offers the best deal. You might get a bigger discount by moving to a new company. The same applies to staying with one insurer for several years. Many insurers will reduce their premiums after you have been with them for three or more years, and the longer time you stay with them, the bigger the discount. However, consider whether the discount really outweighs what another company might offer you. Renewing the policy with the same company may be beneficial at some point, but checking new quotes can be useful in reducing your costs as well.
Review your Policy Regularly
Your policy must reflect the value of your home and possessions. Therefore, it is essential to make adjustments concerning the amount of coverage every time you add or sell something of your property. For example, in case you sold a valuable item, you won't need the same amount of coverage and will want to reduce it.
Re-evaluating your Valuables
will also help adequately adjust your coverage amount. Some items you possess could have decreased in value, for example, valuable art work, expensive jewelry, or high-end computers. Obviously, you don't want to pay for coverage you don't need and will want to reduce or cancel your floater.
Explore Private Insurance Market
If you live in a high-risk area that is vulnerable to storms, fires or crime and have been purchasing your Homeowners coverage through your state's high-risk insurance pool, or a government plan, you are advised to contact your state department of insurance or check with an insurance agent if you can purchase insurance in the private market at a lower price.
Find out if you Qualify for any Group Coverage
, which can be available through employers, professional associations and business associations. Group coverage often means a better deal than you could get on your own.
If you are 55 years old and retired, you qualify for senior discounts. Many insurance companies give a discount of 10% to retired individuals, because according to statistics, they have more time for taking care of their homes and belongings. Moreover, since they stay at home more, they may spot fires sooner than individuals who work full-time.
Smoking is one of the common causes of home fires. If you trust figures more than words, then smoking results in 23,000 residential fires every year. If you are a non-smoker, you don't only exclude your property from this sad statistics, but also may get a discount from your insurer. If you recently quit smoking, let your insurer know it to see your Home Insurance premium reduced.
Improve Security and Safety of your Home
When you install a sophisticated home-security system, you protect your valuables and reduce the risks of damaging or losing them. Check with your insurer which security systems they recommend and update your safety/security system to better protect your property and earn you a more significant discount.
By adding safety features, such as automatic sprinkler systems, central burglar and fire alarms, smoke detectors, dead bolt locks on all exterior doors, fire extinguishers, fire-retardant materials, and hurricane proof materials, you qualify for lower rates.
Make your home more disaster resistant by adding storm shutters, reinforcing your roof and purchasing stronger roofing materials. To reduce the risk of fire and water damage, consider upgrading your heating, plumbing and electrical systems.
Also, check with your local police department if there is a Neighborhood Watch program in your community and how you can get involved in such a program. This will help you save on your premiums as well.
Increase your Deductible
The higher the risk your insurer is taking, the higher your premium. If you select a higher deductible, you reduce the potential liability of your insurance company and consequently they will reduce your rates.
By increasing your deductible amounts to $500, you save up to 12% on your premiums. With $1,000, you will see your rates decrease up to 25%. Increase your deductible to $2,500 and save up to 30% etc. However, consider how much you can afford to pay in advance and if you will be able to meet the chosen amount in case something unexpected should happen.
Insure your House, not the Land
It is your home and its contents that are at risk from fire, windstorms, theft and other perils covered in your policy. However, even if your house burned down, it wouldn't affect the land under your house. Thus when making a decision on how much insurance to purchase, don't include the value of the land. Otherwise, you will have to pay a higher premium than you need to.
Keep Your Credit Record in Order and Improve Your Credit Score
Your credit score may influence your insurance premiums amount. Many insurers tend to check people's credit and charge according to this information. Get your free credit report each year to see if it contains any incorrect information. It is important to keep it in good working order and correct if necessary. By improving your credit score you work towards lowering your premiums.
When planning on purchasing a home, always consider the cost of its insuring first.
Obviously, a newer home's structure and construction as well as its electrical, heating and plumbing systems will be in better condition than those of an older home. Thus, newer homes' owners are most likely to get a discount on their premiums. Your geographical location plays an important role in determining the Homeowners Insurance costs too. For example, if you live in an area vulnerable to earthquakes or winds, you'll need to protect your house against these perils.