The cost of insuring a home has been on the rise, but there are steps home owners can take to reduce their coverage costs.
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“People miss opportunities to get discounts and credits,” says Ron Moore, senior product development manager at MetLife Auto & Home. “There are always ways to save money.”
Some bill-trimming tactics don’t require much effort at all while others require a big upfront investment. Experts offer the following tips to keep your rates reasonable:
A surefire way to save on your homeowner’s insurance is to shop around and compare plans’ coverage options and rates, according to the Insurance Information Institute.
Shopping around requires a time commitment, but experts recommend researching and comparing plans every couple of years to make sure your rate is still comparative. “You want to take a look and see what’s out there,” says Moore. “You may save money going to another company, or you may not.”
The National Association of Insurance Commissioners www.naic.org has information on how to find and choose an insurance provider in your state.
Choose a High-Deductible Plan
Choosing a high-deductible home insurance plan can save as much as 10%, according to experts, if you can afford the deductible in the event of a claim.
Moore details that homeowners who switch to a $500 deductible from a $250 one can save around 2% to 3% while those who choose a $5,000 deductible will save in the 10% range.
“You’ll pay less in premiums, but remember, if you have a loss you will have to pay more out of pocket.”
Calculate Your Insurance Needs
When determining insurance coverage needs, don’t factor in how much you paid for the home, as experts say that pushes the premium higher than necessary.
According to the Insurance Information Institute, the land under your house isn’t an insurance risk and shouldn’t be included with how much it would cost to rebuild a home.
On the flip side, homeowners can run into trouble with too little coverage because the value of a house is lower than what it would cost to rebuild it. “People say their house was worth $500,000 five years ago and is only worth $300,000 now but that has nothing to do with the rebuilding costs if the house was destroyed,” says Moore.
Disaster-Proof Your Home
Natural disaster risks vary depending on a home’s location, but it’s important to know what your home is susceptible to and take the proper precautions to disaster proof your home to reduce insurance costs.
According to the Insurance Information Institute, some insurers give credits for storm shutters, reinforcing a roof or purchasing stronger roofing materials and even modernizing your heating, plumbing and electrical systems to lower the chances of water damage or the risk of a fire.
Inquire About Discounts
Don’t be afraid to ask your insurer about available discounts since not every money-saving enhancement is advertised.
For instance, Moore says insurers will give a discount for having a dead bolt on your door, having smoke detectors installed and/or using a central monitoring station for fires and theft. Updating a furnace or electrical system brings a discount just like having good credit will give you a lower premium.
There are also discounts for staying with the same insurer for a few years, having more than one policy with the company or if you are retired and stay home a lot.
“Most of the time none of them are a big discount alone,” says Moore. “But if you qualify for three or four there is some substantial dollars to be saved.”