Home Savings: How to Save Money on Your Homeowner’s Insurance
Buying a home is one of the largest investments a person can make. It is a major milestone in a person’s life which makes homeowners insurance so important. The cost of this insurance can vary by hundreds of dollars. This is why it important to shop around and consider the factors listed below.
Have a Good Credit Rating
Those who maintain a good credit rating will find substantial discounts on homeowners insurance (Source: Thomson Schindle Green Insurance & Financial Services Ltd.). In most states, an insurer must inform the customer when there is a negative item on a credit report that can affect rates. Keeping credit in good standing involves paying bills on schedule, keeping balances low and not obtaining more credit than is needed.
Raise the Deductible
The deductible is the amount of money that must be paid on a loss before the insurance claim begins. A higher deductible can provide up to 25 percent in monthly premium savings. Those who live in disaster-prone areas will need to separately adjust the deductibles for earthquake, flood and wind insurance. However, keep in mind that when any kind of damage or disaster happens to affect your home, you will have to pay a higher deductible. Hopefully, by having a smaller month-to-month payment on your premiums, you will be able to save up enough money to be able to afford the higher deductibles.
Improve Home Security
Many insurance companies offer five percent discounts for dead bolt locks, burglar alarms and smoke detectors. The savings can extend to 20 percent for more sophisticated security measures such as a sprinkler system or an alarm that automatically contacts the police or fire department. Before purchasing any security system, homeowners should check with the insurer to see if it is covered and what the savings will be.
Purchase Multiple Policies
Insurance companies may offer a discount to those who buy two or more policies, such as for home and auto. While this can add up to substantial savings, homeowners should compare rates to ensure the same policies are not less costly at different insurers. Only purchase multiple policies if you think there will be major problems with your home. Also, never purchase more than two policies. By purchasing multiple home insurance policies, your coverage will be pro-rated by both insurance companies. In other words, any claims that you file will be covered under both plans to a certain extent. Keep in mind you will also be paying multiple premiums which may seem like you are spending a lot more money than necessary, but if your new home is expected to have a lot of issues, then you might consider having more than one homeowner’s insurance policy.
Find Other Discounts
Different insurance companies will offer various discounts that differ by state. Retired people over age 55 are home more often and have more time for maintenance and may receive a better rate for being a lower risk. Employers and professional organizations may offer a more affordable group rate insurance option. This may provide the convenience of premiums being paid through payroll deductions.
Homeowners insurance is a requirement for owning a house. It not only protects against theft and weather, it also provides liability coverage if there is an accident on the property. Think of it as a safety net against any kind of damage on your property so that you lose the least amount as possible. Consulting with several insurance companies and following the tips above will help a person find the right policy at the best rate.
Category: Home Insurance
