Over time, the average price of items increases. This can apply to your homeowners insurance, just like any other good or service. Over the past decade, homeowners insurance increased an average of 50% nationally. This happens because, as your home and property gain value, the cost to repair or replace it also increases. Insurance companies must comply with these rising costs and that can be why your premium goes up.
By tweaking your policy and making some long-term investments, you can keep your insurance costs under control. Here are 16 ways to lower your homeowners insurance, though be sure to check with your insurance agent before making any changes to your policy (so you don’t risk being underinsured!):
1. BOOST THE DEDUCTIBLE.
Increasing your deductible can have an immediate impact on your insurance costs. A higher deductible will result in a lower premium because you’ll have to pay more out of pocket when a claim is filed. If you decide to increase your deductible, be realistic. You don’t want to find yourself unable to afford a critical repair because you can’t cover the deductible cost.
2. REINFORCE YOUR HOME.
Some investments such as adding storm shutters, reinforcing the roof, retrofitting an older home to resist earthquakes, and updating your utilities can reduce insurance costs. These improvements minimize the risk of fire and water damage. If you live in hurricane territory, you may qualify for discounts through wind-mitigation improvements. This may include adding water barriers by sealing your roof deck; reinforcing and anchoring your roof, floor, and walls; adding approved gable ends; and installing hurricane-rated doors and garage doors. The initial costs can be high, but the long-term investment can lower your insurance costs. These improvements will also make your home a safer dwelling.
3. REDUCE FLOODING RISK.
Flood damage is the number one insurance claim in the United States. If you’re in a high-risk flood zone, there are steps you can take to reduce your insurance premium. You may be able so lower your insurance costs by installing proper flood openings, elevating your utilities above ground level, and elevating your home. If you live in a low to moderate risk area, consider adding flood insurance. While this can initially cost you more, you’ll be protected from flood damages. A homeowner’s insurance policy does not cover damage caused by flooding, so adding flood insurance could save you thousands in the future. The average flood repair cost is about $30,000!
4. LOOK FOR DISCOUNTS.
When shopping around for insurance, ask an agent about discounts. Just like auto insurance, there are several discounts available ranging from customer loyalty program to bundling your policies to enjoying a claim-free history. It can never hurt to ask!
5. ELIMINATE UNNECESSARY COVERAGE.
Evaluate your policy and eliminate any coverage you no longer need. However, always be sure that your coverage is enough to replace your home’s structure(s) and contents. Saving a few dollars by reducing your coverage can cost you a lot more if your home sustains damage and you need to rebuild from scratch. Speak to an insurance agent about home rebuilding costs. In the event major damage occurs, you will want enough coverage to rebuild your home. If you don’t have enough coverage, then you will need to pay out of pocket to rebuild your home and that could be extremely expensive. It’s also a good idea to take a home inventory. In case something happens to your home, you will want to know what things you need to replace and how much they are worth. Once you create a home inventory, keep it somewhere secure. Everyone’s situation is different and your homeowners insurance policy will reflect that, so speaking to an agent is always the best option.
6. REMOVE OLD STRUCTURES.
If you have other buildings on your property, you are probably paying for them on your policy. Consider removing your dilapidated shed to save money on your premium.
7. BUNDLE YOUR POLICIES
Bundling your insurance policies can save you some money. Check with your agent about moving all of your other policies to the same company as your homeowner’s insurance. Most insurance companies offer rewards for customers who have multiple policies.
8. DECIDE CAREFULLY ABOUT MAKING CLAIMS.
Claims can drive up your premium. A large number of claims could cause insurance companies to see you as a high-risk customer. Depending on your carrier, you could even face cancellation for filing too many claims. If it’s a minor claim that you can afford to pay out of pocket, it could save you money, in the long run, to pay for it yourself.
9. EXCLUDE LAND VALUE.
Check with your agent to see if your land is covered by your insurance. If so, consider dropping it. You’re more likely to need coverage for your home, contents, and other structures on your property than for the actual land. However, discuss with your agent before canceling anything.
10. IMPROVE HOME SECURITY.
Adding hard-wired smoke detectors, burglar alarms, and deadbolts to your home may save you some money. Check with your insurance agent first to be sure this will reduce your premium.
11. CAREFULLY CHOOSE YOUR DOG BREED.
Some dog breeds have a reputation for being aggressive. Some insurance companies have a list of dog breeds that will increase your homeowners insurance premium. And sometimes, an insurance company can deny you insurance coverage because of your dog’s breed. A docile, family-friendly dog breed won’t necessarily reduce your insurance costs, but it’s less likely to increase it. If you are considering an exotic pet (like a snake), make sure your policy covers it!
12. TOYS AND OTHER SAFETY HAZARDS.
The CPSC estimates that in 2014 there were 104,691 emergency room visits associated with trampolines. Trampolines, tree houses, pools, and other items can increase your homeowners premiums. Worse yet, you may find that your policy doesn’t cover these items at all. Check your policy. If your insurance company is charging you extra because you have a trampoline or pool, you may save some money (and injuries) by getting rid of it. They are a huge liability! If you have a pool and don’t want to get rid of it, make sure there is a fence around the pool to reduce the chance of someone accidentally falling in.
13. IMPROVE YOUR CREDIT SCORE.
Your insurance company looks at your credit score. If you have bad credit, your premiums will be higher because your insurance company sees you as a high-risk customer. Clean up your credit by reducing debt to income ratio and pay off those credit card bills. Taking care of your personal finances is important, check out these resources.
14. SHOP AROUND.
It pays to shop around for insurance every few years, but be careful. Not all insurance policies are equal. Be wary of insurance companies that offer you reduced rates but aren’t clear how the policy will differ from what you have now. While you may save a bit, you may find you don’t have enough home insurance to cover you in a major disaster. Also, ask about the length of coverage. Sometimes you may think that you’re getting a terrific rate but it’s actually a six-month policy and not an annual one.
15. DISTANCE FROM EMERGENCY SERVICES.
Insurance companies may offer premium discounts for homes in close proximity to fire hydrants, fire stations, and emergency services. If your house catches fire, a fire department a half mile away will probably get their faster than one that is 12 miles away. You can advocate for better emergency services, including asking your town to install a hydrant if you’re living near a public water main and there isn’t one close to you.
16. PAY YOUR BILL IN FULL.
Most insurance companies charge you fees for making monthly insurance payments. Pay in full at the start of the billing cycle!
Though insurance costs may be on the rise, there are ways you can curb your premium. Knowing your options is the first step to saving on your homeowners insurance. Speaking to your insurance agent is important when trying to reduce your insurance costs. They will know what coverage you need and what you don’t need. Because insurance is specific to the policyholder, your insurance agent can help you get the best insurance for you.