Tips To Lower Your Homeowners Insurance
First of all, I am not an insurance agent. Never have been and never will be one. I make my money the old fashioned way. But you don't live as long as I have and not learn a thing or two along the way either. So here are my hard learned tips for you to save some money on your homeowners insurance. Just remember, if all else fails you can always just ask your agent for a discount. What's the worst that could happen?
- Shop – C’mon people. Use the internet and find those bargains. Just make sure you are comparing all the terms and coverage the same way.
- Credit Score - Maintain a healthy financial approach and your credit score can drive discounts too.
- Bundling – Group multiple policies together like homeowners; life; auto; business; RV; etc..
- Deductible – bumping your deductable up from the industry standard of $500 to $1000 can save up to 25%.
- Protection – Smoke Detectors; burglar alarms; security systems; gated communities; storm shutters; sprinkler systems; or dead bolt locks can all help reduce your insurance costs.
- Replacement Values – Don’t over insure yourself by insuring what you think the house is worth; it’s tax value or an appraisal. The true value of your home is based upon many factors including the cost of the lot or property itself. A policy for replacement value does not need to include the cost of the land.
- Claim Free – Well duh. But the logic here is quite simple. Fewer claims = lower risks = cheaper policies. So don’t claim every little thing. You insurance should be for the big stuff. This also ties into raising your deductible to help you avoid filing those little nuisance claims.
- Retirement - Some companies offer retirees a significant discount.
- Neighborhood changes – Did they just build a new fire station near you? Fire hydrants? Did FEMA redraw the local Flood Boundary Maps?
- Method of Paying – My insurance company offers a discount if you pay the whole amount in a lump sum once a year. Or perhaps you’d rather have automatic payments straight from your checking account?
- Deductibles – sometimes there are policies with a deductible based upon a percentage instead of a fixed dollar amount. Make sure you know what you have purchased and if its variable.
- Smoking – Smokers pose a higher risk of accidental fires and insurance companies really don’t like those either.
- Group Discounts – Do you qualify for an affiliate discount through your credit unions, college alumni association; professional organizations; or even what credit card you use?
- Cash Value – This is the opposite of the replacement value option. If you really don’t care to rebuild your home and simply want to “cash out” for the depreciated value of the property, this is much cheaper insurance. It is risky however because guess who sets the value of your stuff?
Last but not least - the simplest and easiest discount is to just ask for it, really. Homeowners insurance is a sometimes volatile and competitive business…..because real estate is a dynamic market. Property values change all the time and all the costs that insurance companies use to estimate your policy costs move around too. By never asking your insurance agent to review the policies your rates may just stay artificially too high.