How to save money on homeowners insurance
Homeowners insurance is often a “set it and forget it” monthly expense, especially if it’s built into your mortgage payment. It may not be until it’s time for renewal that you realize exactly how much you pay.
Fortunately, all it takes is a minimal time investment to uncover several discounts and creative methods to save. Check out these ten surprising strategies to reduce your premium.
2. Boost your credit score
Your credit score affects your home insurance, which may surprise some folks. In most states, insurers assess rates using a credit-based insurance score. As a result, you can be charged higher rates if your insurer determines that your credit score is too low. According to Experian, a FICO score of 670 or higher is considered good credit.
If you want to improve your score, carefully review your credit report to locate any mistakes. Also, paying bills on time and lowering your credit card balances can raise your score.
3. Bundle your car and home insurance
You usually save about 10% on your homeowners premiums when you combine your car and home insurance with the same provider. Even though savings depend on the insurance company, most of them offer discounts if you have more than one policy with them.
4. Dig for discounts
It’s easy to miss a discount you’re eligible for. Homeowners often have the stress of the home-buying process in the background when they get coverage, meaning insurance could be one thing hurriedly checked off the list. You can qualify for discounts if you:
- Have a residence with no smokers
- Own a home that’s less than five years old
- Pay your premium upfront
- Pick paperless billing
- Sign up for automatic payments
6. Increase your deductible
Your deductible is the set amount you pay before your insurer picks up the cost of your claim. Typically, the higher the deductible, the lower the premium, and vice versa. For example, raising your deductible from $1,000 to $2,500 at Allstate saves $272, a 17% difference.
Homeowners with substantial savings can afford a higher deductible. In addition, it may be wise to pick the highest amount you could comfortably pay out of pocket for a claim.
7. Make home improvements
You can decrease your monthly insurance bill by adding features that result in a sturdier home, such as impact-resistant roofing, shatterproof glass and storm shutters. Likewise, you’ll save when you reduce the likelihood of fire and water damage claims by updating old electrical, HVAC or plumbing systems.
9. Review your policy and possessions annually
At a minimum, check your homeowners coverage yearly and ensure it matches any upgrades or changes in your property. For example, if you’ve sold a bunch of jewelry, you may no longer need your added endorsements. Just that one minor change could significantly reduce your premium.
What’s the best way to keep an eye on your possessions? Create a home inventory.
A home inventory is a list of your belongings. You can write a list or use your smartphone to make a video of your stuff, and some companies offer an app to facilitate the process. When you know what you own, it's easier to choose the right coverage and lower your final bill.
10. Save by comparing rates
Prices for the same homeowners insurance coverage can differ significantly between companies. By comparing several companies, you can determine whether switching will save money. You can get personalized homeowners insurance quotes in as little as five minutes at The Zebra.