When it comes to annual or monthly recurring expenses, it is never an exciting thing. In some states, premiums are significantly high, and you would ask yourself if there is a way around that: you may need to cut the costs to the minimum, perhaps you have facing changes and other expenses at the moment. Anyway, it is always a relief to save some hundreds of dollars, to be spent on certainly more interesting things.
While you shouldn’t save just for the sake of it, here are several ways you can take if you really want to get the best rates for your premium:
– Rely on the best insurance providers on the market: this sounds quite obvious, but when deciding to get insurance there are so many companies that you could lose yourself. Comparing quotes is a necessary process if you want the get out the most from your home insurance.
Well-done online research must consider if the company is established, trustworthy, and has built a reputation, or if recent, has positive reviews while few, if any complaints.
Seek not only for the cheapest companies, but above all the ones that can provide you the best service for the price: be aware that a lower premium doesn’t go compromising your coverages, and inform about how claims are dealt with by the insurer.
– Choosing the right amount of coverages: your premium will be proportional to how much coverage you buy to cover the house structure and its contents, plus liability and loss of use. You can choose exceeding amounts, but those will cost you a higher premium even if it won’t serve you at last. A way to avoid overinsuring is to understand your coverages and using the tool on this website to figure out what they could be for the premium.
– Bundle your policies: if, for instance, you purchase a car and home insurance policies from the same company, you will get a lower total premium compared to buying the policies separately because the insurer is pleased to offer more than one product to the same client. Doing so, you will also save time and hassle.
– Raise the deductible: this is a risky measure, but if your priority is to save in the short term, it will be one of the most impacting moves on your annual premium. The amount you are disposed to pay out of your pocket, at the time of compensation for damage /loss, is definitely up to you and requires some budget assessment.
– Adopt safety measures: if you can make your house a safer place and notify the insurer, you will certainly get a lower premium. There are many ways to do it: having an extinguisher within reach or installing alarms for smoke/fire, any intrusion detection system, making reinforced windows against storms and bullets, replacing an old roof to resist hails and thunders, upgrading electrical and plumbing apparatus. Or, if you live in rural areas the availability of hydrants, tanks, and ponds against fire, to mention one.
– Get a house in a less risky place: there are many perils to be covered from, and the number one factor influencing the premium is risk. So, if you can afford to live in an area with a low rate of crime, not exposed to environmental fires, in a region not prone to heavy rains, hurricanes, or earthquakes, then yes, you will benefit from cheaper insurance, and it will be on the years to go. Even in the same city, choosing a district over another can make your policy rates vary a lot.
– Improve your credit score: As a new homeowner, you shouldn’t be bothered too much by this, but mind it is often a requirement with major insurance companies, that want to assess the overall risk associated with you (and calculate the premium accordingly). Aim just to have a profile of on-time payments of bills and other duties, to carry little or no debts: if not, try to fix any negative balance.
If you are a long-standing householder, paying off the mortgage will be the strongest move: if you can push on payment of the balance, it would be seen as a sign of great financial solidity, and insurers will grant lower policy rates.
– Avoid filing claims for unnecessary things: if you are renewing the annual policy, you can expect a higher premium if you made claims in the past three or five years. That is an indicator of the need for insurance to step in, and in order to recover their money, insurers will necessarily charge you: for instance, filing a weather-related claim pushes up the premium by 16% on average, and another 16% for water damage. On the other hand, some companies offer discounts for homeowners who can stay claims-free for a certain time span.
– Seek advice from an appraisal: sometimes, in order to evaluate the real entity in cash of damage inflicted to your house, it would be better to ask directly to an expert before exposing your claim to the insurance company. That could be the case of damages caused by hail or flood, cracking in the walls after an earthquake, to mention some: the money you would spend to be insured might overweigh the direct expenses, and you would file a useless claim, which will cost you eventually.
– Ask for discounts: last, but not least important, always ask your insurer if you are eligible for getting discounts. This is likely for some job categories, as medical personnel, academics, and several others; being part of a non-profit association or similar; even if you and your family members can demonstrate to be non-smokers, your premium can be decreased. Mind also that several major companies have deals for first homeowners.
As you can see, you have plenty of options that can more or less affect the cost of policy: if you can go for at least two of these, you are guaranteed to save hundreds of dollars per year, while you are doing everything possible for your safety.
Remember, knowledge is the key!