5 Tips For Saving Money on Home Insurance

Your home is one of your biggest investments. That’s why it’s important to have a comprehensive homeowners insurance policy.

Experts generally say your home should be insured for the cost of rebuilding, not the market value. But how can you save money on your premium?

Fortunately, there are several smart ways to save on your premium.

1. Review Your Policy

Just like a routine health check-up, it’s a good idea to review your policy on a regular basis. This can ensure that your coverage is up to date and that you are not paying for any unnecessary items. It’s also a chance to ask about any discounts you might be eligible for that are not listed on your current policy.

One of the easiest ways to save on homeowners insurance is by increasing your deductible. This will increase the amount you would pay out of pocket before your insurance kicks in, but it can help reduce your premium. However, it’s important to choose a deductible you could comfortably afford to pay in the event of a claim.

Another thing to keep in mind when choosing a deductible is the average price of goods and services in your area. If the cost of a new washer or refrigerator is on the rise, you may want to reconsider your deductible.

2. Increase Your Deductible

Choosing a higher deductible is one of the most effective ways to save money on home insurance. The deductible is the amount you pay out-of-pocket to file a claim, and it affects how much your premium costs. The more expensive your deductible, the lower your rate will be.

However, it is important to choose a deductible you are comfortable with. You will need to be able to afford to make a claim without putting yourself in financial hardship. It’s also a good idea to crunch the numbers and see how much you can save by increasing your deductible.

In addition to your deductible, there are other factors that can influence the cost of your homeowners insurance. These include:

3. Ask About Discounts

While most homeowners are aware that home insurance premiums are on the rise, they may not be familiar with the many ways to save money on this necessary expense. From installing a home alarm system to bundling policies, it’s important that homeowners consider taking advantage of all available discounts.

Often times, simply asking for a discount can result in significant savings. For example, having a security system installed in your home can result in savings of up to 6 percent, according to online insurer Hippo. Additionally, combining your home and auto insurance can lead to savings of up to 25 percent.

Other potential discounts include having a smoke detector and fire extinguisher, being a nonsmoker, living in a gated community or simply making your payments on time. Lastly, it’s important to remember that rates for identical coverage can vary significantly between companies, so it’s always worthwhile to shop around.

Remember, though, that it’s important to strike a balance between cost savings and adequate coverage to protect your largest investment. Ultimately, it’s a good idea to make reviewing your policy an annual practice, so that your policy is aligned with your changing needs.

4. Check Your Credit Score

It’s no secret that your credit score has a significant impact on how much you pay for home insurance. According to Espenschied, the insurance industry uses a variety of variables to calculate homeowners’ premiums, including the customer’s credit history and payment history. Generally speaking, customers with poor credit history are viewed as higher risk because they may be less likely to pay their premium on time or file a claim.

But if you have bad credit, it’s important to know that this doesn’t automatically disqualify you from getting a policy. Instead, you can work on boosting your credit, such as paying your bills on time and staying below your credit limit. Then, when you have better credit, reach out to your insurance company for a new quote.

Keep in mind that insurance companies usually only check your credit when you first apply or renew. But you can get an idea of the types of rates available by shopping around before you decide. Plus, the type of check used by most insurers (a soft pull) won’t hurt your credit.

5. Shop Around

It’s important to shop around for home insurance, especially since insurers weigh the pricing variables differently. A claim can have an effect on your premium for years, so you want to make sure you’re paying a competitive price. Many companies have tools on their websites to allow you to plug in some basic information and get instant quotes, or you can work with an independent insurance agent or broker. Bundling your homeowners insurance with auto, life or other policies can often lead to significant savings.

Increasing your deductible can also save you money, so long as you can comfortably afford to pay the higher deductible in the event of a claim. Other things that can save you money on your homeowners insurance include a claims-free discount, security upgrades like deadbolt locks and fire alarms, and discounts for being a non-smoker or having an energy-efficient home. Also, some insurers offer discounts for bundling multiple types of policies or payments methods, such as paying your policy in full or setting up automatic monthly payments. These discounts can add up.