What You Need to Know

Insurance agencies use a variety of information to arrive at your insurance quote. The riskier you seem to be, the higher your premiums are going to be. So, by showing them you are low risk, you can likely lower your premiums.

Homeowner’s insurance can end up consuming a large portion of your monthly budget, but it doesn’t have to. A little legwork to find the best deals can save you a bundle on premiums every year. Why pay more than necessary to protect your investment? Read on to learn how to save money on homeowner’s insurance.

Shop Around for Quotes

Don’t accept the first offer of insurance, because it may be too expensive. Talk to at least three insurance agencies about the type of homeowner’s insurance you want. Make sure they are all quoting the same coverage options with the same deductible. You’ll be surprised at how different the quotes may be from one company to another.

Check for Discounts

Don’t be shy about asking for discounts with your homeowner’s insurance. There are several ways to snag them, like installing a burglar alarm, adding fire safety measures to your home, completing certain home improvements, living in a gated community, and even being a non-smoker. While the discount may only be a small percentage, it’s money you don’t have to shell out every month and the little differences can add up to a substantial portion.

Choose A Higher Deductible

If you have an emergency fund of a few thousand dollars, chances are good that you can handle a bigger deductible. When filing a claim becomes unavoidable, you can tap into your emergency fund to cover the deductible. Meanwhile, you can save a significant amount of money by choosing a deductible that’s a few hundred dollars higher.

Keep Your Credit Score High

People with high credit scores are looked upon as a lower risk by insurance companies. Practice good financial behavior by paying your bills on time every month, keeping your credit card balances low, and only applying for new lines of credit when it’s necessary. Just how much can it help? According to Value Penguin, with all other aspects being equal, a person with a credit score above 800 will receive a sample insurance premium of $620, while one with a credit score below 550 will get stuck with a $1200 premium!

Buy A Newer Home

An older home is more likely to have outdated wiring and water pipes, which causes a greater risk for fire and flooding. Houses that are over 35 years old typically start seeing homeowner’s insurance premiums creep up. If you’re in the market for a house, consider shopping for a newer home to save a bit on your yearly premiums.

Skip the Water Features

Pools and hot tubs can cause your insurance premiums to jump considerably. The sad fact is that they can be dangerous, especially in a family-friendly neighborhood. Drowning is the second-leading cause of accidental death for children aged 1-14. Owning a pool is a serious responsibility, and homeowner’s must pay for it with increased insurance rates. If you’re shopping for a home, bypass the ones with pools and hot tubs. If you’re considering having one installed, think twice for the sake of your insurance rates.

Combine It with Your Vehicle Insurance

Insurance companies appreciate loyalty and sometimes give a hefty discount to customers who purchase multiple policies. Ask about the difference in rates if you were to add all of your family’s vehicles on the policy with your home. You may be surprised at the savings of having them all in one place.

Avoid Filing Claims

This may seem silly, because why have insurance if you aren’t going to use it? However, previous claims are one of the biggest pieces of information insurance companies consider when they’re building you a quote. If you’ve acquired multiple claims, that makes you look riskier to them, which causes your premiums to increase. Filing numerous claims in a short period will discourage them from offering you insurance at all! If something small goes awry with your home, consider paying for it out-of-pocket without filing a claim. In addition, take precautions and keep your home updated to minimize the chances of needing to file a claim.

Homeownership comes with a variety of built-in expenses outside of the mortgage payment, and insurance premiums are one of them. While it’s necessary to be covered, avoid paying more for premiums than you must. Thoughtfully consider your needs and take these steps to decrease your rates and stick the extra money in the bank for a rainy day!