On the whole, home insurance is not as costly as auto or health insurance, and it will make up a relatively small part of your monthly cost of home ownership. It can, however, still add up, especially if you are paying higher rates than necessary. If you’re looking to save money on your homeowner’s policy, here are a few tips for keeping your costs low:
- Raise your deductible - Your deductible is the amount you’re expected to pay out of pocket after a loss occurs. If you keep this figure fairly high, your insurance will need to pay less when you file a claim, thus reducing your general risk level. This in turn will translate to lower premiums. Put some money aside in a savings account to cover your deductible in the event of an emergency.
- Insure your home for its actual value - The insurance value of your house will be lower than what you paid for it, since the coverage would be used to repair or rebuild just the structure, not the land.
- Buy only the coverage that you need – Be realistic with yourself about how much insurance you need and which additional coverages are necessary. If you only have a small fence or worn-out shed on your property, you probably do not need to insure them. Focus on your house and important valuables instead.
- Combine your home and auto insurance – Most insurers offer multi-policy discounts and will be happy to reduce your premiums in exchange for your loyal business. Your rates may also go down after you’ve been a member for several years.
- Fortify your home – Insurance companies will offer discounts to customers who take steps to protect their homes from damage. This includes fortifying it against storms, making it fire-resistant and installing a security system to deter thieves. You can ask in advance about whether any specific discounts are offered by your company for particular improvements.
- Reassess your needs frequently – Each year, you’ll need to review your policy to ensure that it is still representative of your needs. Pay special attention to personal property that may have changed in value over the past year, or items that have been sold.
If you complete these steps and discover that you’re still paying too much for insurance, it’s time to switch to a better home insurance company. Comparison shopping is the best way to get lower home insurance premiums, and it will be easy to find the best price once you have assessed your individual insurance needs.
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About the Author
I am a former insurance agent turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.