When money’s tight, you might be tempted to drop your homeowners insurance, but letting your plan lapse could be a costly mistake. You need the protection of an insurance policy for when unexpected accidents or damages take place. Instead of dropping your insurance policy, consider ways that you can reduce your premium.
The first step in lowering your insurance costs should always be to shop around for the best rates. There are many providers you can compare to find the policy that’s best for your budget.
Keep in mind that a lot of different factors influence rates, so the company that’s cheapest for your friend on the other side of town may not be your top choice. Therefore, it’s a good idea to check prices yourself or consult agents or brokers. Be sure to compare not just the bottom line but also what each policy includes. Consider asking your current insurer if they can offer you a better rate.
Install Home Security
A home protection system may lower the chance that you’ll need to make a major claim on your homeowners insurance. Because of this potential cost savings, insurance companies are often willing to offer deals to homeowners who install these systems.
There are many providers you can compare to find the most cost-effective option. Some systems focus on providing alerts if motion is detected on the property or someone breaches a door or window. Others incorporate the ability to notify you or emergency personnel when fires or floods begin.
Bundle Your Policies
Many insurance companies will give you a discount if you have two or more policies with them. For example, you can get your homeowners and vehicle insurance from the same company. Offering multi-line discounts helps insurers get or keep your business, and it can save you money.
Bundling isn’t always the best deal, but it’s usually a good idea to look into it. As with shopping for single policies, comparing bundles from a few different companies can be smart.
Raise Your Credit Score
Insurers often check your credit score before assigning you a premium. A good credit score serves as a sign that you are responsible with money and are likely to pay your premiums on time. Therefore, insurance companies often give better rates to people with higher scores.
If your credit score could use a boost, start by reviewing your credit report to ensure that there are no errors on it. In addition, make it a point to always pay your bills on time, and avoid opening new credit card accounts or taking out new loans if you can avoid it.
Increase Your Deductible
As a general rule, policies with lower deductibles have higher premiums, and policies with higher deductibles have lower premiums. Therefore, if you want to save on your month-to-month insurance costs, consider raising your homeowners deductible, which could save you 25 percent or more on premiums.
High deductibles are best for people who don’t expect to make claims too often. If you have to rely on insurance payouts once every few years, the premium savings won’t end up paying off.
Just be sure that you have an emergency fund to cover your deductible in case you need to make a claim. For example, if you have a $1,000 deductible, it’s a good idea to have at least that much set aside in a savings account. Otherwise, when an emergency happens, you might not have enough money to pay your portion of the repairs. Declining to repair your house after it sustains damages can cause your insurer to cancel your policy, which will raise your rates when you obtain insurance again.
Check into Savings or Discounts
Finally, be sure to ask your agent or broker about specific deals that could apply to you. Some companies offer senior discounts to customers of a certain age. Others might give discounts to veterans, students, or current members of the military.
Insurance companies appreciate good business. Therefore, you might be able to get a discount for remaining with the same insurer for several years. Also, your rates might decrease if you can go a certain length of time without making an insurance claim.
You don’t have to live with sky-high homeowners insurance premiums. Instead, take the time to find low rates and valuable discounts. Your house will remain protected, and your wallet will stay a little bit fuller.