Whether you\’re buying your first house or burning your mortgage papers, if you own a home, insurance is a fact of life. While you can\’t avoid homeowner\’s insurance, there are ways to lower the cost. Below are five actions you can take to keep some of your hard-earned cash in your pocket.
You better shop around. It might be a no-brainer, but a little price comparison is time well spent. Different companies can offer substantially different premiums. Consider getting four to six quotes. If you have a copy of your home inspection, have that handy, as you may be asked about such things as the roof, siding, etc. You can find insurers in your area by searching the internet, the yellow pages, or getting recommendations from friends. The National Association of Insurance Commissioners can help you find information on local insurers. They\’ll even let you know if there were any complaints. Think about using an independent agent. They\’ll have knowledge of what\’s available and can help you get the coverage you need for the best price.
Bundle up. No, I don\’t mean put on another sweater. Most insurance companies offer a discount for bundling your homeowner\’s policy with your auto insurance. Call your auto insurance company to find out. If they don\’t offer this discount, you might want to think about making a change. Just be sure that the combined price is really less than purchasing two separate policies from different companies.
Get a raise . . . on your deductible. A deductible is the amount of your out-of-pocket expenses before your insurer will pay on a claim. Typically, your deductible will be between $500 and $1000. Increasing your deductible could result in a substantially lower premium. Keep in mind that it will also increase your burden in the event of covered damage. You will need to be able to afford the deductible in the event that repairs are required.
Home improvement. See if your insurance companies offer discounts for home upgrades like flood protection or an alarm system. Insurers like to minimize risk, so sometimes making your home more secure will save you money on your policy. Check to see if things like upgrading your electric or plumbing systems will lower your cost. Other things to think about are roofing upgrades, storm shutters, and deadbolts. Balance the cost of the upgrade against the discount you\’ll receive, but don\’t forget to factor in your own peace of mind.
Think outside the box. Find out what other discounts are available. This takes a little legwork, but you may find you\’re eligible for one of the many lesser-known discounts that are out there. You might qualify for a discount through your employer, credit union, AAA, or AARP. Some companies offer a discount if you sign up for automatic payments, if you\’re a non-smoker, or if you\’re a senior citizen. You won\’t know until you ask.
Lowering your homeowner\’s insurance premiums might require doing a little homework, but in the long run it\’ll be worth it. Spending an hour or two on the phone with insurance agents might save you hundreds of dollars per year. That\’s a pretty good hourly rate.