It is not new news that home insurance is essential, but we all like ways to cut costs and save. The following tips are guaranteed to save you money while ensuring the same excellent service and protection for your home.
Here Are 6 Ways To Lower Your Home Insurance Costs
- Fewer Risks, Fewer Costs
- Raise your deductibles
- Cash In On Discounts
- Rebuilding costs, not real estate value
- Higher Credit Score, Lower Insurance Rates
- Don’t settle
Continue reading to find out how you can implement one or more of the absolve listed in your (would be) home insurance policy.
6 Ways To Cut the Cost of Homeowners Insurance
Fewer Risks, Fewer Costs
This is pretty straightforward. The more difficult it is to insure a home, the more risk the insurer takes, the more you would need to pay to have your insurance covered. So, for example, if your house is located in a place that’s frequented by flooding or any other natural disaster, you would need to pay more than if it was located elsewhere.
But seeing as you can not pick up your house and relocate, your best bet is to give the insurance company no reason, or at best, less reason to worry. It starts with something as simple as
Raise Your Deductibles
The first question would be, what are deductibles? Simply put, deductibles are fees you pay towards a loss before your insurance company can cover your claim according to what’s agreed in your policy. As a rule of thumb, deductibles and premiums are on different sides of the scale. The more you pay on one, the less you spend on the other.
For this reason, it is best to spend a few more bucks on deductibles when filing for home insurance. Doing this saves you thousands of dollars, especially if you don’t end up filing an insurance claim. Money that you can later divert towards other investments or even retirement.
Cash In on Discounts
One of the easiest ways to save money on your home insurance is to take advantage of the discount options made available by your insurance company. Unfortunately, these discount options vary from company to company. As such, you would need to do personal research to find out the ones available to you and your insurance plan.
These discounts are often available for things ranging from having smoke detectors installed, the quality of home security equipment on-site, and in many cases, when you go a while without filing an insurance claim. For this reason, you should try to cover minor costs around the home out of your pocket. It just might be the trick to making you eligible for some juicy discounts.
Rebuilding Costs, Not Real Estate Value
One rookie mistake is confusing the cost to rebuild your home with the real estate value. Many people take up insurance with the real estate value of their home, forgetting that only the house is at risk. The land is not at risk of theft, fire, or whatever else might be covered in their policies.
Excluding the value of the land is only the first step to ensuring your home is appraised appropriately. The next step is to ensure to get a new estimate of the costs to replace your home every 4-10 years. These periodic appraisals would consider the change in the price of factors like labor, building materials, to name a few.
Higher Credit Score, Lower Insurance Rates
Maintaining good credit is one surefire way to ensure your rates are reduced when taking out an insurance policy. Many companies use your credit score to determine your premiums and coverage terms.
If you have good credit, congratulations, you have already saved yourself some money, but if you do not or are unsure, you can take steps towards building your credit score by paying bills on time and avoiding taking out credit you do not need.
You are not choosing a streaming platform. The consequences if you end up with an incompatible insurance company and policy could be dire. Make sure you take your time to do as much research as is required, ask friends and family, look online. An excellent place to start would be the National Association of Insurance Commissioners.
When you finally have a shortlist, do not compare just prices. As much as you want a reasonable offer, you want one that also balances quality. DO not be afraid to discard your shortlisted options and start over. This is one area you want to make sure you get it right, no in-betweens. Don’t settle!
Writing this makes me want to reevaluate my home insurance policy. It is an eye-opener. Putting the words on paper allows me to see things in a new light. And just like you (after reading this), I am confident I have all the information I need to choose the right insurance company and policy and save a chunk of money doing so.