11 Ways to Save Money On Your Home Insurance
Now that you know the basics of your home insurance policy, here are 11 ways you can pay less. In many cases, you can get the same level of coverage for fewer dollars.
1. One Insurer, Multiple Policies -- Do you have an automobile insurance policy? If so, is it with the same insurance company that provides your homeowners insurance? If the answer’s no, you’re paying too much -- for both policies. Almost every insurance company that sells home insurance wants its policyholders to also buy auto insurance from them. So, they offer “multi-policy discounts” to entice you. Usually, these discounts are at least 10% -- and some insurers apply the discounts to both the auto and the homeowners/renters policy.
2. Raise Your Deductible -- The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $500 deductible and you file a claim for $1,000 in damage to your home, you pay the first $500 and your insurer pays the balance, $500. The higher your deductible is the less you pay for your policy. Of course, you risk more out-of-pocket if you have a claim, but you save on your premium each and every year.
3. New Is Better -- Insurers really like newer homes. That’s because it’s less likely something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer discounts of as much as 8% to 15% if your residence is new.
4. Location, Location, Location -- Where do you live? If your home is near a fire station, you will pay less for your home insurance. If your neighborhood has fire hydrants you will pay less for your home insurance. If you live in an area that is prone to sewer backup you pay more for this coverage than an area less prone to this problem. All of these factors could cost or save you hundreds of dollars every year. Where you live will impact the cost of your home policy.
5. Insure the House, Not the Land -- Nobody is going to steal your land. Fire and high winds won’t “destroy” it. And your home policy doesn’t cover your land anyway. So, don’t include the value of your land when deciding how much insurance you need. Have your broker run a replacement cost estimate to determine what it will cost to rebuild your home – and other structures – if they’re destroyed. The market value of your land doesn’t matter. If you include the value of the land, you’re paying too much, however we can help you here.
6. Don’t Insure What You Don’t Have – Your home policy includes an automatic protection limit for your personal property. This amount isn't adjustable, but varies depending on the carrier and the coverage agreed to. If you don’t need all that protection you can lower it to save some money. But be careful. You may also need more. Your broker can help you by providing a worksheet to conduct a quick personal property calculation. Also, pay particular attention to items subject to special limits (as described above), items such as jewelry and computer equipment.
7. Being Safe Pays You Back -- Burglar and monitored fire alarms are usually worth discounts of at least 10% to 15% on your home policy. You may get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company. However, not all of these systems qualify for discounts with all insurers. Before you install one, check with your insurer to find out what type of system qualifies for a discount and how much you would save on your premium if you installed the system.
8. Where There’s Smoke . . . -- There’s fire. Smoking (unattended cigarette butts, etc.) produces more than 23,000 residential fires in this country each year. That’s why some insurers have discounts if all the residents in a home are nonsmokers.
9. Don’t Jump Around -- When you know that your insurance is in the hands of a trustworthy and reliable brokerage like Alpine Insurance, keep it there! Depending on the insurance carrier, we may be able to provide you with discounts for policies that have been with the company for a certain number of years. For example, a 5% loyalty discount for at least three years, or a 10% discount for at least five years.
10. Good Credit = Lower Rates – Most companies these days use your credit history as part of their pricing structure. People with better credit will pay less for their insurance in most cases. So, not only is improving your credit rating a good idea by itself, it may also reduce the cost of your insurance.