Wallet Friendly Ways To Save Money On Homeowner's Insurance
When you are looking for ways to save on bills, you may decide to let go of things that you never use. Normally, this is a good thing. There’s no reason to pay for cable when you never watch it, right? Or to keep paying for magazine subscriptions that you have not even looked at in years? And, really, there is no reason to pay a gym membership fee if you would rather workout at home any. In cases such as these, yes, it is smart to cut things you never use.
Sometimes, though, this is the wrong move to make. Some people feel that because they never actually use the insurance they are paying for, there is no reason to continue paying for it. This can be a detrimental mistake, though. If you own a car, you need car insurance all the time. If you own a home, you need to keep the homeowner’s insurance to protect your very large investment.
Instead of cutting your insurance off, why don’t you try cutting it down? There are ways to save money on homeowner’s insurance so you keep your protection but do not break the bank. Try the following tips to save money on homeowner’s insurance.
Shop Around
First and foremost, you should always shop around for different insurance rates. Never assume that just because your company gave you the best rate last year that they are giving you the best rate this year, too. It’s quite possible that they are, but when you are trying to save money, you have to be vigilant over your finances. This means knowing for sure that you have the best insurance rate, not guessing that you do.
Take some time every year to shop around in order to save money on homeowner’s insurance. Look into at least three or four different insurance companies, but the more you can check, the better your chances of finding the best possible rate.
Make Your Home Disaster Resistant
Homeowner’s insurance is similar to auto insurance. Homes that are more likely to incur damage from disasters are going to cost more to insure. To combat this, you need to make your home as disaster-resistant as you possibly can. You can ask your insurance agent exactly what steps you can take to do this, but some common steps are:
Adding storm windows, storm doors, and storm shutters
Reinforcing your roof
Improvements to old electrical units that are a fire hazard
Improvements to plumbing to prevent potential issues that cause water damage
Cutting down trees that could easily fall on and damage the home
Adding smoke detectors, sprinkler systems, and a fire alarm
Not only can steps like this help you to save money on homeowner’s insurance but can also help protect you and your family in the event of a disaster, and prevent a headache of damage.
Make Your Home Theft Resistant
Just like reinforcing your home against disaster can help you save money on homeowner’s insurance, so can reinforcing your home against theft. Some of these common steps include:
- Adding deadbolts and stronger locks
- Installing a burglar alarm that alerts the police
- Reinforcing windows and sliding glass doors
Let’s be honest: If a burglar really wants to get in, nothing is going to stop them. However, adding extra security measures can definitely discourage them from coming in. Most burglars are going to take the path of least resistance. If you have fortified your home, they will likely move on to the next less protected home.
Adding extra home security is a great idea, even if you are not trying to save money on homeowner’s insurance. However, saving money is the goal here, so you have to be smart about all of this. Don’t just run out right now and pick up the first lock you find or pay thousands for a security system. Not everything qualifies for a discount, so you really need to ask your insurance agent what you can do to get a discount on homeowner’s insurance and what types of equipment qualify. Otherwise, you might be blowing a lot of money instead of saving it.
Improve Your Credit
Did you know that your credit score can actually impact your insurance rate? Crazy, right? For the longest time, I had no clue at all that credit factored in. Unfortunately, it does make a difference. It sounds crazy, but think about this from the insurer’s point of view:
If a company insures your home and a covered event occurs, they are going to be spending out money. They want to know what kind of person you are so that they will know what to expect, like if you are a risky or responsible person, if you manage your obligations well, and so on. If your credit is low, this gives them a negative picture of you and feel that it is risky to insure you. Therefore, they are going to charge you more money to make sure they are covered for covering you.
Do what you can to improve your credit score and you will likely save money on homeowner’s insurance.
Only Pay For What You Need
So I said that you need insurance, but you do not need every bit of coverage - at least, I hope not. Homeowner’s insurance can include a lot of coverage, such as:
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If something does happen, how much would it cost to repair or rebuild your home? Just because your home was originally $100,000 does not mean that you need to cover it for that amount. You might be able to repair it for a fraction of that cost. The lower the total coverage you get, the less you pay the insurance company. You do not have to guess on this, though. Have a professional come out and help you determine how much coverage you should have.
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Do you have any buildings, such as a shed, that are not attached to your house? If you do, it fits in the “other structures” category. If it is an old building or one you do not use, it may not be worth adding to your insurance. If you do want to add it, be realistic about the value.
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Here we are talking about all personal property inside of your home, such as clothing, electronics, jewelry, appliances, and other items of value. Being accurate with the value of these items can save money on homeowner’s insurance. You can do this by keeping up with any paperwork associated with the purchase of the item. It is also a good idea to take photos of these valuables and put the photos and the paperwork in a fireproof safe or safety deposit box at a bank. It will do no good if the documentation and photos are lost or destroyed. Really, though, if it is something you would not miss in the case of a disaster or theft, do not add it to your coverage. You should regularly take a look at the personal property you are covering with insurance as you might decide to lower the amount of coverage you have.
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So let’s say that due to a disaster, your home sustained some damage and you cannot stay there for a while. If the damage is covered by your insurance and you have “loss of use” coverage, your insurance agency should cover the cost of your stay in a hotel until you can return home. It might also pay for you to travel farther if you are going to stay with a family member during your displacement from your home that is out of your area. You do not have to have this coverage. Anyone who has family or friends that would let them stay in such an event could completely avoid this altogether.
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This is good coverage to have. If someone is injured on your property, this coverage helps pay for the damages or injury so that you do not lose any assets in the process. However, you probably do not need coverage that exceeds the value of your assets. In this case, you might want to discuss this with a financial advisor to determine if you should add this coverage and how much you should add.
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If you or someone else gets hurt on your property, this coverage should take care of it. However, if you have really good health insurance that covers accidents, you might not need the coverage here, too
Bundle Your Insurance
Bottom line: Insurance companies are businesses, and competitive ones at that. Each one wants your business, so they offer incentives to get you to sign up with them. One of these incentives is offering a discount if you get both your homeowner’s insurance and your auto insurance through the same company, which is what they call bundling. In fact, the more insurance you can bundle, the better discount you will probably get - like if you have five drivers in the home, you can have everyone covered by the same company. This is a great way to save money on homeowner’s insurance.
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Higher Deductibles
When you purchase an insurance policy, you are requesting a certain amount of coverage. The insurance company agrees to that amount of coverage, but only after you pay out a certain amount of money. This is called a deductible. If your deductible is $200 and your home sustains $800 worth of damage, your insurance company will require that you pay $200 toward repairs first.
Then, they will pay the remaining $600- if the damage is covered by your policy, of course. Now, the higher your deductible, the lower your premiums, which means when you choose a higher deductible, you save money on homeowner’s insurance.
Be Real About Costs and Value
I mentioned this above but it is worth repeating.
The amount of value you claim affects the amount of insurance coverage you get. The amount of coverage impacts the amount you have to pay for the insurance.
It is always best to be as honest and as accurate as possible with the value of your possessions.
If you still own a box TV, do not claim the value to be the same amount as a flat-screen. If you only have $100 worth of clothes in your closet, do not double that amount. If you claim that the value is more than it actually is, you are paying to protect things you do not even own. That is not something that you want to do. Do your best to be accurate with the value of all property you are insuring.
Check Into Group Insurance
You might want to look into group insurance, as well. Some employers have deals with insurance companies that offer employees a discount on certain insurance types. Your homeowner’s association might also have access to discounts. Actually, any church or other organization you are involved with might offer group insurance. It never hurts to ask.
Review Your Policy Regularly
Things change constantly. The value of your home yesteryear may be completely different than the value today. You might have more or less personal property. You might have changed jobs.
It is important that you review your policy regularly to keep up with any changes. You should definitely check it at least once a year, but it is also a good idea to look it over any time you experience any change in life. Keeping your coverage up to date can really help you save money on homeowner’s insurance.
Find Every Discount Possible
A big step to take when you are trying to figure out how to start saving money on homeowner’s insurance is to find every discount possible. Some common discounts include:
Sometimes, the best discounts for you are not things that are advertised or even thought of normally. Take a look at some less well-known discounts offered by different insurance agencies:
- A loyalty discount
- A discount that is given for not filing any claims for a set period of time
- Being married
- Living in a gated community
- Paying your policy premiums in full
- Discount for non-smokers
- Discount for automatic payments
- Discount for recently buying a home
- Discount for being employed by the same company for a set number of years
- Discount for being a retired homeowner
The truth is that you could get a discount for anything the insurance agent thinks of. Ask them what types of discounts they offer. If they tell you that you have all the discounts you can get or that your rate can go no lower, tell them that you will be shopping around. More often than not, that motivates any business to work hard to keep your business.
Avoid Unnecessary Fees
Sometimes it is not so much the premiums themselves but the fees that break the bank. A common fee that can eat up your paycheck is late fees. Be sure that you pay on time every time to prevent any potential late fees.
A moment ago, I mentioned that some insurance agencies give a discount if you set up automatic payments. Do not assume that this is the case, though. There are plenty of places that charge additional fees for automatic and online payments.
Also, be aware of fees for taking payments in person. I remember going in to pay a bill once and the total was $5 higher than the bill stated. When I asked why, they said, “It’s a convenience charge for us taking your payment and applying it to your account.” Convenience for who, I would love to know?
Anyway, do not let these fees surprise you. I know that $5 does not seem like much, but multiply that by 12 months and you have paid $60 when you could have put that away just by paying online. Do yourself a favor and look over your policy and receipts to make sure that you are not paying for any unnecessary fees.
Conclusion
It is possible for you to get the home protection you need without paying an arm and a leg. Most people that end up paying too much do so because they do not put the time or effort in to find out what they are paying for or how to decrease it. With just a little dedication to lowering your bills, you can improve your finances greatly. And you can definitely save money on homeowner’s insurance.