5 Ways to Save on Home Insurance

Buying a home is one of the largest investments most people will make in a lifetime. The house may be where buyer's children take their first steps and where his or her family bonds and relaxes. With so many memories under one roof, it’s important to protect that home with an insurance policy.

But shopping for an insurance policy can be tricky. Many consumers seek low payments – there's nothing wrong with that as long as they don't compromise on coverage. Take these tips for saving on your policy into consideration when shopping for or renewing your home insurance:

Shop around

Companies can offer the same coverage at very different prices. Why? Companies evaluate risk according to their own formulas. With that being said, it’s crucial that you compare premiums when shopping for coverage initially and when it’s time to renew your policy.

When you’re comparing prices among companies, be sure that you understand the difference between the amount you paid for your home and the cost to rebuild it. This is important as the latter is how dwelling coverage is determined, and it often gets misconstrued.

When buying a home, you may pay for the land along with the structure. However, if your home is destroyed due to a covered peril, you’ll only need to rebuild the home, which would exclude the cost of the land since you already own it.

Conversely, materials and construction costs could become more expensive over time, meaning that the amount of dwelling coverage you selected should be reviewed on a yearly basis to ensure you have the proper protection.

When shopping for coverage and ways to save on home insurance, consider bundling your home, auto and other insurance policies with the same company. Doing so can save you hundreds per year.

Ask about discounts

Discounts vary by provider as well as by state, so you’ll need to ask about which ones you qualify for. You could receive price breaks for:

•            Living in a gated community. Because gated communities typically are safer, with fewer instances of burglaries and other crimes, you may have a lower monthly premium than those who reside in other areas of town.
•       Purchasing a newer home. It’s simple. Newer homes are less likely to have issues with wiring, plumbing or pipes, among other things. Talk to your provider to see how young your home would have to be in order to qualify for this discount.
•       Being a long-term policyholder. Insurance companies often reward policyholders who stick with them for long periods of time. Ask if your carrier offers this type of loyalty discount.
•        Beefing up your home’s security and safety measures. If you’ve installed a security system, smoke detectors, updated electrical systems, etc., you could see a price reduction.

These are just a few of the many discounts that could be available.

Raise your deductible

Your deductible is the amount you agree to pay toward a claim before your insurance takes over. It has an inverse relationship with your premium – all other things being equal, as your deductible goes up, your premium will go down.

Use caution when raising your deductible. If you raise it beyond your comfort zone, it could create problems for your finances if disaster strikes – leaving you to pay more toward a claim than you have on hand. Set your deductible at an amount that you’re content paying.

Maintain a good credit rating

Insurance companies often take your credit rating into account when determining your premium, which can mean lower insurance costs for those with better scores. The reason: Many believe good credit signals a lower risk of filing a claim.

It’s also vital to regularly monitor your credit rating to ensure that no mistakes are made that could raise your premiums or cause you other unnecessary financial burdens.

Review your policy and the value of your belongings yearly

Finally, annually assess the value of your possessions and review your insurance policy to ensure that you’re adequately protected.

Much can change in a year. Say you started collecting expensive pieces of art. Doing so may require you to schedule an endorsement to make sure you have enough coverage. Similarly, if you decide to sell some of your most valuable pieces, you may not need so much coverage. 

HomeInsurance.com is an online resource for homeowners and drivers across the country. Offering comparative automobile and home insurance quotes, consumers rely on HomeInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeInsurance.com blog provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.