6 Ways to Help Reduce the Cost of Your Home Insurance

piggybank-300x224 Purchasing home insurance is just one of the many “necessary evils” of being a homeowner. In the event of any damage caused by fire, theft, or any natural disasters, homeowners insurance can save you thousands of dollars. It can also help protect you in the event that someone is injured on your property. While homeowners insurance is extremely important to have, the monthly premiums can be quite expensive. Here are some ways to help you reduce those monthly premiums:

Shop Around

If you choose to stay with one insurance company for a long time, they might give you a discount for being a reliable customer. However, you’d probably have a better chance saving money if you shopped around at other providers. Once you get quotes from other insurance companies, you can go to your current insurance company and tell them the deals other agencies are offering you. If your current insurance company wants to keep you, they’ll come down on your price. If you don’t know where to find insurance quotes, visit the National Association of Insurance Commissioners’ (NAIC) website. The NAIC can direct you to the qualified insurers in your state. You’ll be able to see typical rates, reviews, and more. Just don’t become too enticed by low prices. You need to make sure that each quote offers you all the coverage you need before committing.

Bundle Your Insurance Policies

If you watch television regularly, you’ll notice commercials with auto insurers telling you to bundle your auto policies together to save. You can definitely save by bundling, but you can also bundle your homeowners insurance in with your vehicle’s insurance. Typically, the more policies you bundle together, the more you’ll end up saving on insurance. Bundling policies is also extremely convenient. You’ll have one bill to pay, and usually one insurance agent to deal with if anything should ever go wrong.

Talk with Your Insurance Agent

If you’ve already managed to bundle your insurance, simply ask your insurance agent about the ways you can save money, and they’ll be able to help you out. For example: Your insurance agent can tell you what you need to insure and what you don’t. Or, they’ll discuss different kinds of home improvement projects you can do to help lower your monthly payments, like making your home more disaster resistant, installing up-to-date smoke and carbon monoxide detectors, or installing a new security system. Naturally, more intense projects would include structural improvements such as reinforcing the walls and roof. While this can certainly lower your premium, it might cost more in the long run. 

Make Sure You Aren’t Over-Insured

If you bought a house for $200,000, you probably told your agent that your home is worth that amount, and then he or she gave you a policy that reflects just that. The issue here is that when you paid $200,000 for your home, that price included the land, and you don’t need to insure the land. The land isn’t going to be swept away by a tornado or stolen by a thief. The average land price is something like 10 to 15% of the overall cost of the house, so be sure to subtract 10 to 15% from that price when you’re insuring your home.

Increase the Deductible on Your Policy

If you have a low deductible, you usually have a high monthly payment. Therefore, if you want to lower your monthly payment, raise your deductible. The deductible is the amount of money you pay out-of-pocket every year before your insurance kicks in. Say you have a $500 deductible. If $600 dollars-worth of damage is done to your home, then, in most cases, you would pay the $500 and your insurance company would cover the rest. Consider the amount you can put toward your deductible before increasing it.

Take Precautions and Avoid Claims

Despite what many people believe, you don’t have to report every little thing that happens. If you have multiple claims, there’s a good chance your monthly premium might go up, as you’ll be considered a high risk. If you have a few small problems (usually things that your deductible would pay for) you might be better off not making a claim and being responsible for your own costs. If you have long periods of time where you have no claims, your monthly premiums will likely go down or, at the very least, stay the same. No matter which way you choose to reduce your premium monthly payments, make sure your home is adequately covered. Even if your premium is enviously low, the last thing you’d want to do is to be under-insured or not insured at all.  
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