7 Ways to Save Thousands on Homeowners Insurance
Homeowners insurance is a necessary expense, however, there are ways to save on this expense. This article will list 7 ways to save on homeowners insurance. Some of the ways may require changing your coverage, while others may be as simple as shopping around for a better deal.
1. Shop Around: Compare Rates From Different Companies
When it comes to saving money, shopping around for the best deal is always a good idea. This is especially true when it comes to homeowners insurance. Rates can vary widely from one company to the next, so it pays to compare rates before choosing a policy that fits your needs.
There are a few things to keep in mind when shopping for homeowners insurance. First, be sure to get quotes from several different companies. It’s also a good idea to understand the coverage you need and make sure the policy you choose covers all your bases or work with an agent that will find the best coverage possible.
Finally, don’t be afraid to negotiate with your insurance company. If you feel like you’re being quoted at a higher rate than you should be, ask for a discount. Chances are, the company will be happy to provide you a discount if you have a good credit score and have a good history. By following these tips, you can be sure you’re getting the best possible rate on your homeowners insurance policy (Forbes, 2022).
2. Raise Your Deductible: You’ll Pay Less Each Month, But More If You Have To Make a Claim
You may be paying too much for your homeowners insurance. One way to save is to raise your deductible. By doing so, you will pay less each month, but you will have to pay more should you make a claim.
Before you decide to raise your deductible, consider how much you can afford to pay out of pocket if you need to file a claim. If you have a history of filing claims, or live in an area prone to natural disasters, raising your deductible may not be the best option for you.
Talk to your insurance agent about other ways to save on your homeowners insurance premium. You may be able to get a discount by bundling your home and auto insurance, installing security devices, or increasing your credit score. Find out if your insurance company offers any discounts to policyholders who have burglar alarms, fire suppression systems, or other home security devices.
3. Get Discounts:
Things like having a home security system or being claims-free over a certain period of time can help you get a discount on your home insurance policy.
According to an article by The Zebra (2022), many insurance carriers offer discounts for policyholders up to 10% by installing a security system. This amount can vary from one insurer to another, but we can provide you with a variety of options that will benefit you the most. A burglar alarm is a good starting point.
Other add-ons you might consider could be:
- Fire Alarm
- Smoke Detectors
- Deadbolts
- Fire Extinguishers
- Sprinkler systems
- Water Leak Detection Systems
Ask your insurance agent what is the best option for you to save more money on your homeowners insurance policy.
4. Bundle Your Policies: Combine Your Homeowners and Auto Insurance For Discounts
Bunding your policies such as combining your homeowners insurance and auto can be provided with a discount, however it doesn’t mean it can save you a lot of money. This depends primarily on your credit score and insurance carrier, but can also be affected by other factors. According to U.S.News (2021), you could save around 10-25% when you combine both policies, but should first see if it’s worth it. Bundling can also help with insurance security. Insurance security is a safety net that can prevent an insurance company from dropping you as their client. It is important to note that companies can drop your policy if you have tickets, have filled multiple claims or other factors. Having bundled policies can lower the chances of this (NerdWallet, 2021).
5. Pay Annually: Monthly Payments Often Come With a Service Fee
By paying annually versus paying monthly you can get discounts for paying in full and you will only have to worry about a single payment which can help you better manage your budget. On the other hand, paying monthly can spread out the cost of your premium, it may be more convenient to manage with auto-pay options, if you cancel you will only be responsible for the premium that month, but you may probably get charged a processing fee and possibly interest for your monthly balance.
The best option for you depends on your personal circumstances. If you need help budgeting or prefer not to have large expenses all at once, then paying monthly may be the way to go.
6. Improve Your Home: Things Like Adding a New Roof Can Lower Your Rates
You could save hundreds of dollars by installing a new roof in your home. For instance, a new roof could help lower your rates because it makes the home safer and may reduce the amount of damage your home sustains. However, if you need a new roof due to a disaster, a roof replacement could cause your rates to increase instead of decrease. Another overlooked improvement is weatherproof blinds to protect against flying debris. Improving the overall structure of your home as well as adding features that can prevent costly repairs can lower your premiums by portraying you as a responsible homeowner, giving you an advantage in the unfortunate case of filing a claim.
Unfortunately, things such as a roof replacement could backfire on the cost of your premium depending on your timing. If you decide on your own that it’s time to replace your roof, the insurance company will love you for taking the initiative to improve your home and take care of your family. On the other hand if the insurance company decides to randomly inspect your home and orders a mandatory improvement, roof replacement, or other due to safety and structural concerns, your rates may stay the same or even rise (Quality Roofing).
7. Review Your Policy Regularly: Make Sure You’re Not Overpaying For Coverage You Don’t Need
More often than ever when you obtain an insurance policy you may probably stay with that policy for the rest of your life without ever researching again or switching. Whether it’s out of comfort or your insurance provider sold you on that policy, it’s a smart choice to constantly research your coverage and pricing over benefits. One thing you may want to consider is analyzing your policy for details on your coverage. For example, if you live in an area like Florida, New York, Chicago, or other where an earthquake is not a considerable possibility, you may not want that benefit added to your insurance policy.
On the other hand, you definitely do not want to be underinsured. Let’s assume your home is valued at $200,000 today and get a policy based on that value, in 15 years your home could be valued at $300,000 and if you didn’t update your policy and need to file a claim, your insurance provider will only cover the amount your home was valued at when the policy was obtained.
Another problem with not keeping up with your policy could be underestimating your deductible when filing a claim. You might be prone to believing your insurance policy has a flat deductible for all claims such as $500 per claim or a percentage such as 5% or 15%. Your deductible per claim is not always the same depending on the type of claim you are trying to file. For example, a flood claim vs a fire or wind claim (Forbes, 2013).
At FAMPRO, you can be sure to get the best guidance and the best rates. Talk to us today and see how you can save the most on your insurance needs.
Disclaimer: The information provided in this blog does not guarantee better savings. Savings are based on different factors that vary from individual to individual such as credit score, location, income, etc. You should always research and consult with your insurance provider before making any decisions.