Here are seven ways to cut the cost of your homeowner's insurance.
1. Shop around – and do it early! Check with several different home insurance companies to get rate quotes. (An independent insurance agent can provide rate
quotes from a variety of companies.) Deciding on your homeowner’s insurance
should begin as soon as possible in the buying process. It is preferable to at least tentatively secure your insurance during the "Option Period" of the Sales Agreement. So start shopping now.
2. Raise your deductible. The deductible is the amount of money you have to pay
towards a loss before your insurance kicks in. Home owner’s insurance deductibles
usually start around $250. However, if you increase your deductible to $500, you’ll save
up to 12% on your premiums, $1,000 deductible will save you up to 24%, and so on.
The critical thing is to balance the cost of your premiums with what you can comfortably afford to pay, if you sustain a loss.
3. Buy your home and auto policies from the same company. Many companies will give you a significant discount if you buy both home insurance and auto coverage from them. This will also save you money on your auto insurance.
4. Don’t skimp when buying a home. When deciding on the home to buy, keep in mind the potential cost of insuring your new investment. A newer or well maintained home will usually have updated electrical, heating, and plumbing systems and the overall structure
is likely to be in better condition than those of an older home. Your premiums may be affected by the current condition of the home.
5. Insure your home, not the land. While your home and its contents are at risk from
fire, theft, windstorms, and other perils, the land your home sits on is not. Don’t include
the value of the land in deciding how much home insurance you need to buy. This is a common mistake that is often overlooked by insurance companies.
6. Improve security and safety. Items such as dead-bolt locks, burglar alarms, and smoke detectors can usually bring discounts in your premiums. Your insurance company may offer a significant discount if you install a sophisticated home-security system.
7. Check your policy annually. Your policy should reflect the value of your home and belongings. If you review your policy every year, you can easily make the necessary adjustments. |
