12 Ways to Save on Your Homeowner’s Insurance
Looking for a way to fatten your wallet?
You might try spending a few minutes lowering the cost of your homeowner’s insurance policy.
Here are 12 things you can do to help put some green back in your pocket:
1. Raise your deductible. The higher your deductible, the lower your premium. A $1,000 deductible may lower the overall insurance policy cost by as much as 25 percent.
Ask your insurance company if your policy allows you to assign separate deductibles to different risks. For example, you might have a lower deductible for windstorm damage if you live in an area prone to tornadoes but a higher deductible for another type of risk less common in your region.
“Raising your deductible is a tried-and-true method of lowering premiums,” says Charles Nyce, the senior director of knowledge resources for the American Institute for CPCU/Insurance Institute of America. The trade–off, Nyce says, is that you must put aside cash to cover the deductible and have easy access to those funds if you have to make a claim.
2. Buy multiple policies from the same insurance provider. Companies pay a lot of money to market their services to prospective customers like you. If you can save them some of those marketing dollars, they may be willing to split the difference.
Some insurance companies will cut the cost of your premiums by as much as 15 percent if you buy two or three policies from the company. Just make sure the overall price you pay is still less than the cost of separate policies from different companies.
If you have your homeowner’s and auto polices with the same insurer, “it means efficiencies for the insurer that they can pass on to the consumer as savings,” Nyce says.
3. Make your home a safer place to live. Most insurance companies will offer a discount on premiums if homeowners take steps to make their homes safer. For example, you might be able to cut costs by installing storm shutters or shatterproof glass or strengthening the roof of your home. And, in general, you can upgrade appliances and heating, electrical and plumbing systems to lower the chance of a mishap in your home.
Raising your deductible is a tried–and–true method of lowering payments. But the trade–off is that you must put aside cash to cover the deductible and have easy access to those funds if you have to make a claim.
4. Install home security devices. On a similar note, homeowners can often receive insurance premium discounts by installing a simple security device: a smoke detector, dead bolts or a burglar alarm. You can save even more on your insurance policy by investing in a home sprinkler system or a high-end home security system that communicates with your local police or fire department in the event of a burglary or fire.
“The discounts you receive will not be enough to offset the cost of the security system, but you will also get peace of mind and send a message to would-be burglars to find another target,” Nyce says.
5. Compare prices. Thanks to the Internet, comparison shopping for just about any service or product is fast and easy. A number of websites allow you to comparison shop for various types of insurance, and you can also go directly to a specific insurance company's website for information about premiums and policies.
You can get a snapshot of an insurance company from the websites of independent rating companies or consumer magazines. State insurance regulatory agencies may also provide similar information.
6. Understand the difference between what you paid for your house and what it would cost to rebuild it. The ground your home sits on is not affected by disasters such as fires or windstorms and shouldn't be vulnerable to burglars. Don’t add in the price of the land to the overall value of your home. If you do that, you’ll be paying for insurance coverage you simply don’t need.
7. Ask for the senior discount. Seniors tend to have fewer claims than younger people. If you’re 55 or older, ask your insurance company for a discount.
8. Investigate group coverage with an employer, a professional association or an alumni organization. If you’re unable to get a decent quote on your own, look to join a nonprofit professional association, alumni organization or other nonprofit group. These organizations often negotiate group rates for a variety of insurance policies so that their members can save money while increasing their coverage.
9. Ask for the longevity discount. If you’ve been with your current insurance company for at least five years without having made a claim, you may be entitled to a 5 percent discount simply for being a good customer.
10. Shop around for private insurance if you’re in a government plan. Private insurance coverage may be less expensive than offerings handpicked by the government. Be sure to investigate several companies’ insurance products in order to understand what’s out there.
11. Scrutinize your policy limits and the value of your belongings. While the price of rebuilding your home continues to climb, the cost of replacing your furnishings may have declined. That means you may be able to cut down on your contents coverage, saving money on your annual premium. You may also be able to save money if your children have gone to college or have left college and are now living on their own. Once a year, take a look at what you have and what you’re covering and make sure you’re not paying for coverage you don’t need.
12. Buy smart. If you’re just thinking about buying a home, you may want to become familiar with the kinds of discounts that homeowner’s insurance companies offer. For example, if you live close to a professional fire department or a fire hydrant, you may be able to get a discount on your policy. Most insurance companies will be happy to discuss their discount policies with you and how you can qualify for them.
