Some might think that a homeowner can only reduce the cost of homeowner insurance by using witchcraft or some other type of magic. Jokes aside, many people are convinced that they can’t really save on homeowner’s insurance unless they make a few significant changes that may alter their plan.
Homeownership can often be overwhelming and a bit complicated, but it’s not necessarily rocket science. For example, if you take advantage of these nine lesser-known strategies and discounts, you can considerably lower your homeowner’s insurance.
In this article, the team at Habitat for Humanity of Broward has compiled a list of ways you can save on home insurance. If you have any questions or concerns after reading the article, we’re more than happy to help you with them.
Lower Homeowners Insurance – Is It Possible?
People rarely talk about homeowners insurance, but in reality, it can be really costly, and you may end up paying a lot more than you should. If you want to learn how to lower your homeowner’s insurance, keep reading, as these tactics can help lessen this financial burden.
- A Homeowner Can Reduce the Cost of Homeowner’s Insurance by Raising Their Deductible
An excellent and effective tactic to decrease your premium is raising your insurance deductible or the amount you pay if you need to make a claim. For instance, if you raise your deductible of $1,000 to $2,500, you will be able to save roughly around 12 percent a year.
While this may look a bit steep initially, raising your deductible will put more money in your pocket per month that would otherwise end up with your insurer. On the other hand, you will have to ensure that you have enough money saved for more considerable expenses that you need to pay out of your pocket if you need to file a claim.
- A Homeowner Can Reduce the Cost of Homeowner’s Insurance by Working Around Small Claims
Many people might find it tempting to file even relatively minor claims. Still, if you want to lower your homeowner’s insurance, some experts think that they might be better off paying smaller expenses out of pocket.
Why? Several insurance carriers offer regular discounts for homeowners who remain claim-free for a specific period, which usually isn’t longer than a few years.
On the other hand, how much of an effect can claim filing have on your rates? For instance, a claim for wind damage may raise your annual insurance costs by 9% on average, while water claims may lead to an increase of 19% yearly. That said, you might be better off if you cover minor damages without claim filing to lower your homeowner’s insurance.
- Take Advantage of Home Improvements
Depending on the improvements you made to your home, you might be eligible for insurance discounts without even being aware of it.
For example, upgrades like impact-resistant roofing and storm shutters make your home more resistant to damage which can result in more considerable insurance savings. Also, you might be eligible for discounts if you upgrade outdated electrical systems and/or plumbing.
Requesting a new home inspection to evaluate these improvements and open the possibility of maximizing your potential discounts.
- Improve Home Security
Even the essential home security features may be able to help you lower your homeowner’s insurance. Basics such as home detectors, deadbolt locks, and burglar alarms may result in a 5% discount.
On the other hand, more elaborate features like a monitored burglar and fire alarm with a comprehensive sprinkler system can result in more significant 15%-20% discounts, according to experts.
- A Homeowner Can Reduce the Cost of Homeowner’s Insurance by Improving Their Credit Score
Some people might be surprised to learn that their credit score may also impact the premium for their insurance.
In most states, companies use credit scores to create insurance scores to determine insurance rates. In other words, if your insurer determines that you have a low credit score (for instance, your FICO score is under 630), you may end up paying a higher premium.
There are several ways you can improve your credit score. First, you may want to read your credit report to identify possible errors. Also, reducing your balances and paying your bills on time are excellent ways to get started with improving your score.
- Eliminate High-Risk Things
If you want to lower your homeowner’s insurance premium, you can get rid of things that your insurer might deem as “attractive nuisances. ” These can be anything from playground equipment to trampolines and even swimming pools. While they are inherently fun, they can increase your premium.
Attractive nuisances are property features that tempt children to play on them, and if they get injured while using them, you can be held legally responsible for their injuries. As such, these items are considered liability risks, and eliminating them can help you lower your premium.
- Bundling Home and Auto Insurance
Getting a bundle policy from the same insurance carrier may result in a 5% to 15% lower premium, according to experts. Naturally, this will vary from company to company, but most carriers will provide discounts if you have several policies with them.
- Ask Your Carrier Directly About Discounts
The best way to learn how you can save on home insurance is by asking your insurer directly. Simply check for any new discount options you can take advantage of. You never know, so checking with the company may be worthwhile.
For instance, some firms will offer additional discounts for the following:
- If you’ve recently purchased a new home
- If you opt for paperless billing
- If you don’t have anyone living in the house who smokes
- If you work in a specific industry or have a specific career, such as engineering, teaching, firefighting, etc.
- Do Your Research
Rates for the same insurance coverage can significantly vary between different companies. While there are a lot of factors that will determine your premium, doing your research on these companies can help you save considerable amounts of money in the long run. For starters, consider looking at the most prominent insurance companies and their websites. Chances are, you will find an online calculator that can give you a ballpark figure of your yearly premium. Also, you can always call these companies for a more precise quote from their agents. Compare different companies and their discounts and opt for the one that offers the most benefits for your situation.
It’s All About Knowing the Quirks and Perks
All it takes is some learning and research to save money on homeowner’s insurance. Still, that’s only one aspect of becoming a responsible and valuable member of your house and your community. Learning the basics of homeownership can help anyone navigate overwhelming situations with ease.
On that end, you can always reach out to us and learn more about our homeownership classes and training programs.
