Tips to Cutting Back on Your Homeowner’s Insurance Bill
As if you didn’t have enough bills to pay, homeowner’s insurance just adds to the pile. But just because you’re stuck paying this bill doesn’t mean you have to spend more than necessary.
Here are some ways to effectively cut down on your homeowner’s insurance bill to keep more money in your wallet.
Consider a Higher Deductible
One of the easiest and most common ways to reduce homeowner’s insurance premiums is to simply opt for a higher deductible. Generally speaking, the lower the deductible, the higher the premiums. If you want your premiums to go down, increasing your deductible is one way to go about it.
Deductibles are only paid when you actually file a claim, so if you’ve got a clean record with little to no claims made over the past, it might be worth it to increase it. If you can comfortably afford to cover less-expensive claims on your own, there’s really no reason to have a deductible under $1,000. By having a deductible this high, you can save as much as 25% on your monthly premiums.
Bundle All of Your Policies
If you’ve got a car and a life insurance policy, you might want to consider bundling these all up with one insurance provider to take advantage of some savings. Most insurance companies offer discounts to clients who take out more than one policy with their company. Bundling your policies under one umbrella can also make it easier to keep tabs on your insurance coverage.
Have a Security System Installed
In order to protect themselves, insurance companies tend to charge more for coverage to those who are more at risk to file a claim. By the same token, they’re also willing to charge a lower premium to customers who are less likely to file a claim.
As such, a home that has been secured with an installed alarm system is more protected against burglary or vandalism. Security systems are designed to drastically cut down on any incidences against a home, and insurance providers tend to reward homeowners who have such systems installed by offering a lower premium.
The same goes for other components that can protect the home and its contents, including storm shutters, deadbolts, smoke detectors, and even carbon monoxide detectors.
Upgrade Your Old Plumbing and Electrical
If your home has aging plumbing and electrical, you’ll probably pay more in insurance simply because such older systems are more likely to be the cause of damage or accidents. Completely replacing an older system with a new one can reduce your insurance premium.
Pay in Yearly Installments Rather Than Monthly
Insurance providers will typically offer the option for you to pay monthly or annual premiums. Since premiums tend to come with a small processing fee, you’ll pay a slightly lower premium by paying annually rather than every month. These processing fees vary from one insurance company to the next, but you can expect to save as much $50 to $100 a year by paying your premiums on an annual basis.
Keep a Good Credit Rating
Having a healthy credit history can help you save money in a number of ways, including with your insurance premiums. Insurance providers are using credit information more frequently when assessing how much to charge their customers. Keeping your credit rating in good standing can be done by ensuring that your bills are paid on time, your credit cards are never maxed out, and you never take out more credit than you can comfortably deal with.
Stay Loyal
Many insurance companies appreciate customers who stick around for the long haul and often reward them with discounts on their premiums. Depending on the insurance provider you are with and how long you’ve been with them, you can expect to receive as much as a 10% discount on your premiums.
Don’t Buy Too Much Insurance
Take a close look at your policy and make sure that you are only taking out as much as needed to cover your home and belongings. There’s no sense in paying for more insurance than you need. You should also revisit your policy every year to make sure your policy accurately reflects your current assets, as sometimes certain items may no longer exist or have decreased in value to the point that they no longer require coverage.
Shop Around
Just like you would shop around for a car or a home, you should take the time to do the same with your insurance provider. The same type of coverage may be more expensive with one insurance provider over another. Obtain quotes from at least three different companies, and make sure that you are comparing apples to apples.
The Bottom Line
Having homeowner’s insurance is a must. In fact, your mortgage lender probably won’t approve you for a home loan if you don’t have a policy. Having said that, there are ways to lower the amount you pay in insurance premiums. If you have any questions about insurance for your home, don’t hesitate to speak with your insurance agent or representative to get the best rate for your policy.
