7 Ways To Save On Home Insurance
The median home price in the United States reached $259,906 this year.
US home values were up 5.8% since last year and Zillow.com predicts they will rise 7.0% in 2021.
As home prices go up, so do other economic factors like cost of labor and construction materials, which is why your home insurance premiums also tend to rise as well.
According to Insurance.com, the National average rate for home insurance this year was $2,305 for a $300,000 home with a $1,000 deductible and a $300,000 liability.
Depending on where you live, this number could be much higher. For instance, Oklahoma is the most expensive state for home insurance at $2,140 more than the national average.
Compare that to Hawaii, where the weather is fairly consistent year round, insurance rates are $499 or $1,806 less than the national average.
While you’re probably not going to move states to secure a lower rate on your home insurance policy, there are still plenty of ways you can lower your premiums.
For example, did you know some insurers will offer reduced premiums if no one in the home smokes?
Smoking accidents lead to significant damage, so insurers will reward you if you quit smoking.
Today we discuss seven more ways you can save on home insurance you probably don’t know about…
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#1: Chase 850
Your credit score will affect your home insurance rates. The generic FICO Score has a range of 300 to 850, so a perfect score on that scale is, of course, 850.
Most insurance companies use credit scores to determine how “risky” you are to insure. The closer your credit score is to 850, the lower risk you are and the lower your insurance rates could be.
There are several ways to keep your credit score in check, and paying your bills on time is just one of them. Google “how to improve your credit score fast” to find ways you can bump up your score today.
#2: Save 10-30% By Bundling
One of the best ways to save on home insurance is by bundling it with another policy, like your car insurance. Insurers want to sell you as many products as possible, so they’re willing to offer you a cheaper rate if you have more than one policy with them.
Bundling your home and auto insurance can save you up to 30 percent! If you’re happy with your home insurance provider, try to switch your auto insurance to the same provider. There could be some easy savings waiting to be had.
#3: Bump Up Your Deductible If This Happens
Your deductible is how much you agree to pay towards a claim before your insurance company steps in. The higher your deductible, the lower your premiums tend to be since insurance companies assume you’re less likely to file a small claim.
Because of this, it’s fairly easy to lower your premiums if you raise your deductible. But, you should proceed with caution since you don’t want to raise your deductible too high to where you can’t afford to pay it should you have to file a claim.
This is why you should only bump up your deductible if you have enough in savings to cover the higher cost. If you can comfortably cover the higher deductible, this can be a great way to save on your premiums.
#4: Ask About Lesser-Known Discounts
Insurance companies offer discounts for all kinds of things, but you wouldn’t know it unless you asked. Here are just a few discounts you might qualify for:
- Age Discount
People over 55 and retired are usually home more, which means they’re less likely to be victims of theft. Some companies offer a “senior discount,” which can be up to 10% off.
- Gated Community Discount
If you live in a gated community, you could save from 5-20% since insurers view gated communities as less vulnerable to crime.
- Claims-Free Discount
If you don’t make any claims in 10 years, you can save up to 20% on your home insurance.
- Homeowner’s Association Discount
If you live in a neighborhood with an HOA, you can sometimes get a discount of 5-10%, because insurers see these communities as less risky.
- Non-Smoker Discount
If you smoke, you’ll pay more for home insurance because the risk of fire is higher. Nonsmokers may qualify for a discount of up to 15%.
- Water Sensor Discount
Water sensors can detect leaks before they turn into floods. You can buy passive or active sensors at any big box store. Once they’re installed, you might qualify for a discount of up to 10%.
#5: Update Your Home Security
Most home insurance companies offer discounts if you have a home security system installed. They also prefer to see deadbolts on doors and locks on windows.
You can also up your home safety by replacing old wiring systems and updating your roof with a more damage-resistant type. Before you make any upgrades, check with your insurance broker to see if the savings are substantial enough to warrant the upgrades.
#6: Review Your Coverage Needs Once A Year
The reason we recommend you review your home insurance needs at least once a year is that things can change quickly. The value of your home may have gone up or you may have done some home renovations that qualify for discounts we previously mentioned.
It’s also worth taking inventory of your home so you know how much coverage you need for personal belongings.
Setting an annual reminder for a policy checkup is a simple way to ensure you’re not overpaying or underinsured – which can erase any savings you might gain should you have to file a claim.
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#7: Take Advantage Of The Free Market
The last tip is to always compare rates from different providers. You never know what kind of deals or rates you might find, so spending an hour or two getting quotes from other providers may be well worth it. Each company evaluates risk differently, so you may be able to get the same coverage at a lower price somewhere else.
But before you make the leap, check to make sure your existing provider doesn’t offer loyalty discounts. This could be a good time to negotiate a cheaper rate with your provider.
To a richer life,
The Rich Life Roadmap Team