Homeownership comes with certain expenses that you need to pay every month, and insurance is one of them. It may seem like another unnecessary added expense, but in reality, insurance is one of the most important expenses because it can cover you for damages that could happen to your home. It also typically includes personal property coverage for the personal belongings inside your home, as well as liability insurance in the event that someone gets injured on your property, among other things.
Because home insurance can be expensive, it’s important to understand exactly what you need and what you don’t. Otherwise, you could end up paying more than it’s worth. It’s also a good idea to sit down with an insurance broker to see how to reduce your home insurance premiums. Here are a few ways to lower your home insurance costs:
Not all home insurance policies are created equal. Each insurance company has different parameters, terms and premiums, so it’s wise to shop around before settling on a particular policy. Gathering quotes online can help you get a better idea of each insurer’s contract rates and limits.
While it is important to consider each company’s premium rates, it is also a good idea to take note of their deductibles, inclusions, exclusions, and any available coverage add-ons to make the most of your money. If you’re unfamiliar with all the terminology and clauses, it’s best to seek the help of an insurance broker.
An insurance professional has detailed industry knowledge and a level of expertise that you can rely on. They will determine your specific needs to find the best policy with the right amount of coverage with the most competitive premiums. Brokers are required to protect your interests and make sure that your needs are put first, not the insurance company’s.
Looking at Bundling Insurance Policies
You can often lower your monthly premiums if you bundle your home, auto, and any other insurance needs together with the same insurer. Ensure that the combined price of your policies is lower than buying each one from different companies. Your insurance broker will have detailed knowledge of all the insurance companies that offer these discounts that you can take advantage of to reduce your home insurance premiums.
Increase The Deductible
Another strategy you can use to lower your insurance premium is to increase your deductible. A deductible is an amount you pay out of pocket when you make a claim before the insurer covers the rest. Keep in mind that the deductible should not be higher than what you can afford to pay if a claim needs to be made. To find out if this strategy is best for you, talk to your insurance broker.
Improve the Security of Your Home
Certain security upgrades can also help to reduce your home insurance premiums because these improvements reduce the risk of losses from break and enters, burglaries and thefts. For example, you can set up:
- A new alarm system to keep out intruders
- Video monitoring to improve security
- Deadbolt locks to make it harder for forced entry
Make Your Home More Disaster-Resistant
Many insurers offer discounts for new energy retrofits and improvements to make your home more disaster-resistant. Take a moment to evaluate your home’s current state and features, and consider installing:
- Upgraded smoke detectors to mitigate fire risk
- Sophisticated sprinkler systems that send alerts to monitoring stations
- A backwater valve to prevent sewage backup
- A sump pump to protect your home from flooding and water damage
- An energy-efficient furnace with more safety features
- Better roofing to prevent leaks
- Newer plumbing and electrical
If you’ve made any of these home upgrades, contact your insurance broker to find out how these improvements can make a difference in the premiums you pay.
Inquire about Other Discounts
Different insurance companies may offer various discounts. For example, there are modified costs for those who are non-smokers or retired. A claims-free discount can apply if you have never filed a property claim. You may also qualify for certain reductions by being employed by a particular organization or having a membership at certain associations, whether they are alumni, professional or non-profit affiliations. Additionally, if you’ve been with your insurance company for a long time, they may offer a better rate for your continued loyalty.
Ask your broker about these types of discounts so they can help you make the most of your money as it relates to your home insurance.
Maintain Good Credit
Good credit scores and histories may establish you as a lower-risk customer because it points to the idea that you could be less likely to file a claim. To maintain good credit, ensure that you pay your bills on time, make the minimum payment (or more), and use credit wisely by avoiding greater balances than you need. Discuss with your insurance broker if credit scores impact your premiums and if your current standing merits any discounts.
Reduce Your Coverage
If you have fewer risks, own lower-value items, or are simply in a position where you can pay more out of pocket in the event of a loss, you can consider reducing your coverage. The most basic packages for home insurance allow savings on premiums, but because they offer less coverage, keep in mind that you will have to carry more of the financial risk for future losses. Your insurance broker can review this option with you and ensure you’re making an informed decision for your current situation.
Consider Factors that Affect Home Insurance when Buying a Home
Before you buy your home, there are certain factors you can consider that may reduce your home insurance premiums after purchase. Neighbourhoods that are low-risk may impact your rate due to their history with fewer costly claims. Houses that are closer to fire hydrants and stations can also bring down the cost of your insurance. Additionally, older homes may have outdated electrical, heating and plumbing systems, so consider finding properties with these upgrades already in place or plan to make those improvements yourself after purchase.
Review Your Coverage Every Year
The current value of your home and condition can change over time, requiring adjustments to your policy. As time goes on, you might also need to increase or decrease your coverage limits depending on the type and amount of protection you need. Certain life changes can also award you with new discounts – such as a retiree discount or a non-smoker discount. Review your policy each year with your insurance broker to ensure you are only paying for the coverage you need.
If you’re ready to start shopping around for a home insurance policy, or you simply want to find out if you’re paying too much on your current one, contact us at Tanner Insurance. We’ll explore options for reducing your home insurance premiums without limiting the coverage.