How Can I Save Money on My Homeowners Insurance?
Your homeowners insurance premiums can vary by hundreds of dollars, depending on the size of your house, amount of coverage, your deductible, and the insurance company you choose. Many homeowners mistakenly assume that all policies and providers are the same. This type of thinking could cost you thousands of dollars in the long run. Here are some ways you can save money:
Shop around.
Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly, or access information via the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
Get quotes from different types of insurance companies. There are three types of insurance companies:
- Those that sell directly over the phone to the consumer
- Those that sell through their own agencies that share the name of the insurance company
- Those that use independent agents
Price alone should not be the determining factor. Customer service and fair, efficient payment of claims are also important. You should speak to friends and co-workers about their experiences with various providers. Check with your state insurance department to research consumer complaint ratios.
Keep in mind: if you have a serious claim, these are the people you will be relying on to help you through it.
Raise your deductible.
A deductible is the amount of money that you have to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible, the more money you save on your premium. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25%.
Buy your home and auto policies from the same insurer.
Ask your insurance provider if they offer discounts for multiple policies. If your provider offers auto and homeowners insurance, find out how much you’ll save and then compare that to the individual costs of your existing policies.
Make your home more disaster-resistant.
Ask your insurance agent or company representative what you can do to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters and shatter-proof glass, reinforcing your roof, or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing, and electrical systems to reduce the risk of fire and water damage.
Don't confuse what you paid for your house with rebuilding costs.
The land under your house isn't at risk from theft, windstorm, fire, and the other perils covered in your homeowners’ policy. So you don't need to include its value in deciding how much homeowners insurance to buy. If you do, you'll pay a higher premium than you should. The higher coverage will not always result in a higher disbursement from the insurer.
Ask about discounts for home security devices.
Most insurance providers offer at least a 5% discount for items such as smoke detectors, burglar alarms, and dead bolt locks. You can save up to 20% with the installation of an a security system or sprinklers. The key is to read the policy language and ask lots of questions before, during, and after you choose a policy and a provider.
