In a day and age where the price for everything is increasing, searching for savings is essential. One monthly bill that many people do not think to look for saving money is home insurance. Depending on what the deductible of the policy is, how safe the insured home is, its location, and many other factors, the premium, or what the policy costs, can vary greatly. Many of these factors are within the insured’s control, so lowering the cost is not as difficult as it may sound. Here are some tips to lower monthly insurance premiums.
Shop Around for Prices
With all of the insurance companies on television advertising for home insurance, it is no secret that there are a lot of options to choose from when picking a home insurance company. Many companies provide quotes online and have representatives that will generate a quote on the spot. Keeping a list of every quote is helpful when trying to make a decision. However, when shopping for insurance, it is essential that quotes for the same type of policy are compared. The premiums, the monthly or annual cost, along with the deductible, what has to be paid in the case of an event like a fire, windstorm, etc., and the benefits, what is paid out from the policy, all have to mirror each other.
Know the Lingo
A great tip for saving money on anything, but especially insurance, is knowing the jargon that is used in the insurance industry. Research what premiums, deductibles, and policy limits are. That way, when speaking to a private insurance agent, telephone representative, or generating a quote to buy online, there are no surprises. The buyer will know exactly what they do and do not need, and not overpaying for unnecessary coverage.
Know the Home’s Worth
To be prepared with knowledge is the easiest way to get the best price. Along with industry jargon, knowing and understanding the property’s value is crucial to only pay for what is necessary when seeking a new insurance policy. Remember, the land underneath the home is not what would have to be rebuilt in the case of an event. It is the home itself. Do not include the entire property’s value when estimating the value of the home, because the premium will be so much incredibly higher. Understand the difference between entire property value and rebuilding value.
Try to Bundle
Most insurance companies offer multiple different products. These can include policies for homes, cars, motorcycles, boats, and apartment renters. When searching for a new home policy, or savings on a current one, a wise move is for the seeker to check with their current company. A discount may be offered when “bundling” policies, or paying one payment for multiple products through the same company.
Stick Around
If possible, remain a loyal customer to the same insurer. Sticking around has its benefits, as many companies offer a loyalty discount in the form of tiers that only increases with time. For example, a small discount may be applied automatically for being a good customer for an entire year. However, after three or five years, more substantial discounts may become available for remaining with the company for an extended period. Ask the company’s representative if they participate in such a program.
Review, Review, Review
Once a year, belongings need to be reviewed for their updated value. Ensure that what is being insured is still in the home and that those items have kept their value from last year. An example would be if a $5,000 home theater system was purchased a year ago and it is now only worth $3,000, and the policy would need to be updated to reflect that so unnecessary coverage is not paid for.
Safer Homes Can Mean Smaller Premiums
Making sure that the home has updated security features like windows and home alarms could save money on the monthly premium. Some companies provide discounts for such features, knowing that it is more difficult to damage the property and they are less likely to have to pay out on a claim. Whenever the insured is requesting quotes, they should ask what discount programs, if any, the company participates in. This is especially true before installing alarm systems, replacing windows, or completing any other renovation as these can be costly upfront, despite it being worth it in the long run.
Check with an Agent
While it may be easier and more convenient to obtain a quote from an insurance company online, specific agent-only discounts may be available. Word of mouth is a great way to find a reputable insurance agent who can assist in all sorts of insurance needs. Agents are also great resources when considering to bundle policies, learn about insurance, or when a claim needs to be filed.
Consider the Cost of Insurance When Buying a Home
When most people purchase their new home, especially a first home, they do not remember to include the cost of the insurance with the cost of their home. They take their approved amount and find a house for that cost, not thinking of the additional payment of insurance that will cost each month. When the celebrating of new home-ownership is over, and the bills start to come, they realize they are stretched a little thin financially. When purchasing a home, it is crucial to include the cost of the insurance into the monthly budget, along with the proposed mortgage payment. This way a healthy budget is created and the new homeowners are not stressed in a few months.
Maintain a Good Credit Report
Even after the home buying process is complete, it is essential to maintain a good credit record. This means paying bills on time, communicating with lenders, not overspending, and making sufficient payments each month. Insurance companies do pull a credit report to see if the applicant has a good payment history, and can base premiums slightly off of that. The better the credit, the more likely of a lower premium.
Review the Necessary Deductible
If the homeowner can afford a higher deductible in the case of an event, increasing it can decrease premiums. This is because, in the event of needing access to the policy, the less the company has to pay out, the less the policy is going to cost. This is an excellent place to start, especially if there is already existing policy, as it could make it possible for the insured to stay with the same company longer and grab more savings down the road.
Whether this is a first home or a fifth, these tips can help a homeowner put some money back in their pocket. Buying a home is what most people would consider the most significant purchase of their lives, but having it insured does not have to be.
