Homeowners are looking for ways to reduce expenses as interest rates and inflation will strain household budgets by 2025. Your home insurance is a great way to save money. Homeowners insurance rates have been rising across the country, so you could save a lot of money by lowering yours.
How can you achieve this? Here are some tips from leading insurance experts to help you reduce your monthly cost without compromising coverage.
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10 Tips for Lowering Your Home Insurance Premium
Protects your home, possessions and liabilities against unplanned losses. Your premiums may include additional costs that you can reduce or control based on the coverage you choose.
You can save money on your insurance by:
1. Find out the value of your house
Ashleigh Trent is the personal lines director at Tower Street Insurance and the co-founder. She says that sometimes the value of the home plus inflation guard can outpace actual inflation, and the home may be overvalued. Trent advises homeowners to review their home replacement costs every five to seven year to make sure they are not paying too much.
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2. You can customize your coverage for other structures
The Other Structures coverage covers everything except the main house on your property, including sheds, fences, and detached garages.
Trent advises that you can reduce the limit if you have a home on a small plot or a house with a lot of space and minimal structures.
Greg Martin, President of Think Safe Insurance notes, however, that some carriers offer a range of options to suit your needs while others charge fixed percentages.
3. Ask for discounts
It is easy to save on home insurance. You may not be aware that many insurers offer discounts for non-smokers, retirees or first time homebuyers. You may also be eligible for a reduced rate if you choose to pay your premiums annually rather than monthly, and if you set up automatic payments.
4. Investing in loss prevention measures
Trent advises: “The best claim to make is the one that doesn’t happen, so limit your exposure.” Some insurance discounts are based on built-in features, such as hail resistant shingles or sprinkler systems.
You can still save money on a home that is already built. The most cost-effective upgrades include installing burglar alarms, automatic water shutoff devices and fire monitoring systems.
Brent Thurman of Keystone Insurance says that this lowers the likelihood of filing a claim, and insurers will reward you by lowering your rates.
5. Protect your claim history
The insurance companies are more interested in how frequently you make claims than the amount they pay.
Trent warns that “most carriers won’t offer a quote if you have three or more claims in the last five years.”
It is best to handle minor losses yourself, rather than filing a claim. This can result in higher premiums.
6. Your deductible can be increased
Martin says that a higher deductible usually means lower premiums. The most cost-effective range is $1,000 to $2,000. When choosing a deductible it is important to balance the costs.
Thurman says that you should choose a policy amount that will save you money up front but not be prohibitively expensive in the event of a disaster and the need to file a claim.
7. Bundle policies
Trent explains that while most people are aware of bundling auto and home insurance “some carriers offer additional discounts for having an umbrella policy (excess liabilities) and a valuable article policy.”
Ask your agent to discuss all the bundle options available so you can maximize your savings.
8. Contact an independent agent
Let an independent agent handle the insurance calls instead of you.
Trent explains that “[these] agents represent you in the insurance marketplace, and certain carriers only offer prices through independent agents.” They have access to exclusive markets and can compare dozens or policies all at once.
9. Credit rating improvement
Trent explains that “many carriers tie their rates closely to an individual’s IBS score (Insurance Bureau Score), or financial credit rating.”
Improving your credit can help lower your premium. Focus on paying your bills on time and reducing your credit card balances. Check your credit report for errors to improve your score.
10. Liability risks are a concern
Accidents can occur on trampolines, swimming pools and playground equipment. This increases insurance rates. These “attractive nuisances”, which may attract people to your house and cause injury claims, are considered by insurance companies. When deciding to install these features on your home, consider the added cost.
The Bottom Line
Shopping around is one of the best strategies. Insurance companies have different rates and discounts on the same coverage. You could save hundreds of dollars on your insurance premium by getting quotes from three different carriers.
Every year, review your insurance policy. Thurman says to check that you are not overpaying for insurance or underinsured due to the increase in value of your home. Tell your agent about any changes in lifestyle or home improvements that may qualify you for additional savings.
