Know the 10 Things You Can Do to Save on Home Insurance

Know the 10 Things You Can Do to Save on Home Insurance

The price you pay for the insurance of your home can vary by hundreds of dollars, depending on the insurance company you purchase from. Here are 10 things you can do to save on home insurance:

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  1. Review

You could save yourself a good sum of money by asking your friends, checking the Yellow Pages or contact your state insurance department for ideas. National Association of Insurance Commissioners (www.naic.org) has information to help you choose an insurer in your state, including complaints. States often provide data on average rates paid by major insurers, and many states provide the frequency of the company’s consumer complaints.

Check consumer guidelines, insurance agents, businesses and quote services for online insurance. It will give you an idea of price ranges and will show you which companies have the lowest prices. But don’t consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim. Use the above-mentioned complaint information and talk to a number of insurers to get a feeling for the type of service they provide in evaluating service quality. Ask them what they’d do to reduce their costs.

2. Boost deductible

Deductibles are the amount of money that you have to pay for a loss before the insurance company starts making a claim, depending on the terms of your plan. The lower the limit, the more money on your insurance you can save. A premium of at least $500 is now provided by most insurance companies. You can save as much as 25 percent if you can afford to increase the limit to $1,000. 

Remember that your insurance policy may have a separate deductible for certain types of damage if you live in a disaster-prone area. When you live on the East coast, you may have a separate deductible windstorm. The same is the case for places that are prone to hail storms and earthquakes.

3. Don’t compare what you paid for your house with the costs of reconstruction

The land under your house is not at risk from theft, windstorm, fire and other hazards covered by the policy of your homeowners. Therefore, do not include its interest in determining how much insurance to buy from homeowners. If you do, you’re going to pay a premium higher than you should.

4. Purchase the same insurer’s home and auto plans

Some firms that sell homeowners, auto and liability coverage will take 5-15% off your premium if you buy from them two or more policies. But make sure that this combined price is lower than buying different companies’ coverage.

5. Make your home more resilient to disasters

Find out what steps you should take to make your home more resilient to windstorms and other natural disasters from your insurance agent or company representative. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better and able to withstand earthquakes.

Therefore, consider upgrading the heating, plumbing and electrical systems to reduce the risk of damage to fire and water.

6. Improve security at home

You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.


7. Check for other deals

Companies offer many types of discounts, but not all of them in all states give the same amount of discount. For instance, homeowners that are retirees who spent more at home are less likely to be burglarized and may also spot fires sooner than working homeowners.

If you are at least 55 years old and retired, certain businesses may be liable for a discount of up to 10%. Certain employers and professional associations are running group insurance programs that can offer a better deal than you can get anywhere else.

8. Keep a good credit record

Setting up a solid credit history will reduce insurance costs. Insurers are gradually using credit information in insurance policies for homeowners. The insurer should, in most jurisdictions, notify you of any adverse action such as a higher rate. At which point you must check the accuracy of the information the insurer relied on. Pay your bills on time and don’t get more credit than you need. Keep your credit balance as low as possible. Check your credit record regularly and promptly correct any errors in order to keep your record accurate.

9. Stay with the same insurance company

If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years, and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.

10. If you are in a government plan, look for private insurance

If you live in a high-risk area — say, one that is particularly vulnerable to coastal storms, fires, or crime — and have bought coverage from your homeowners through a government plan, you can consult with an insurance agent or company representative or contact the state insurance department for the names of companies that may be interested in your sector. You can find that you can take steps to allow you to buy insurance on the private market at a lower price.

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