Whether you’re shopping around or reviewing your current policy, saving money on home insurance without sacrificing coverage is possible. By assessing your existing range, seeking out discounts, and increasing your deductible, you can save hundreds or even thousands of dollars on your premiums annually.
Adding security features such as alarm systems, water detection, and energy efficiency devices can also help you qualify for discounts. You’ll want to talk with your agent about these opportunities before implementing them.
Shop Around
If you’re looking for a new homeowners insurance policy, shopping for the best price without sacrificing coverage is essential. It’s easy to overlook this vital aspect of insurance, but the right approach can protect you against a wide range of potential perils, from fire damage to theft and floods.
Homeowners’ insurance quotes vary from company to company, so comparison shopping is one of the most effective ways to lower your premium. NerdWallet research shows that some homeowners could save $1,000 yearly by getting the cheapest rate.
The more details you can give about your home’s structural elements and other factors determining your homeowner’s insurance premium, the better quotes you’ll get. For example, if you recently installed new wiring or updated your plumbing, you may qualify for a discount.
It’s also a good idea to ask your current insurance company if they offer discounts for remaining claim-free for a certain amount of time. This can save you significant money each year and ensures you’re still getting the coverage you need for your home.
Increase Your Deductible
One of the most effective ways to save money on home insurance without sacrificing coverage is to increase your deductible. Deductibles are a portion of your insurance policy you must pay out of pocket when you file a claim.
The deductible amount you choose should be appropriate for your financial situation. For example, if you do not have an emergency fund that you can quickly draw from in the event of a claim, it may make sense to choose a lower deductible until you build up savings for such an event.
Insurers generally offer a choice of two deductible types: flat or percentage. The former is typically between 1% and 10% of your home’s insured value, while the latter generally is higher than that.
Depending on where you live, the deductible type you choose will vary. For instance, in areas with high wind and hail damage, insurers may require you to purchase additional coverage with a higher percentage deductible than the standard flat deductible.
In most cases, a higher deductible will lower your premiums, but it is essential to determine how much you can reasonably afford to spend out of pocket should you need to file a claim. This is a personal decision that’s best made with the help of a professional.
Review Your Policy
Regularly reviewing your policy is vital to keeping your family and belongings protected. This routine checkup can help you avoid paying for coverage that’s no longer applicable, and it could also result in a potential reduction in your insurance costs.
Typically, this insurance review takes place once per year to ensure your coverage is current. It’s also a good idea to do this whenever you have a significant life change that may impact your home insurance, such as having a baby or getting married.
In addition, keeping your deductible in mind as you shop for home insurance is essential. Often, the higher your deductible, the lower your premium will be.
It’s also a good idea to ask about discounts, such as those offered by your employer, professional and alums groups, or group insurance programs. These discounts can often be applied to your homeowners or renters insurance policy and could save you money if you’re an active participant in the program.
Add an Umbrella Policy
Suppose you’ve been involved in an auto accident or have a property damage claim that exceeds the limits of your underlying insurance policies. In that case, an umbrella policy can help. This extra coverage can be very affordable, with options starting at $1 million and going up to $10 million.
Umbrella insurance can cover damages that exceed the underlying liability limits on your home or auto policies, watercraft or motorcycle guidelines, and even a landlord’s policy. Whether you own an apartment building, a house, or an estate, umbrella insurance can help protect your savings and assets when lawsuits occur that could put you in financial ruin.
Adding an umbrella policy is one of the best ways to save money on your home insurance without sacrificing coverage. You can add this policy to your existing home and auto insurance or purchase a stand-alone umbrella policy. Often, umbrella insurance comes from the same company that provides your homeowners or auto insurance.
Ask Your Agent
A thorough understanding of your policy and deductibles can save you money by making it less likely that you’ll have to file a claim. This knowledge also can help you avoid being underinsured, which can become a serious financial issue in an emergency.
The location of your home is another consideration that could affect the cost of your homeowner’s insurance premiums. For instance, buying a house near a fire hydrant, in a low-crime area, or a gated community could help you keep your premiums down.
Many insurance companies offer discounts for homeowners who stay claim free for a certain number of years. In addition, there are loyalty discounts for those who stick with the same insurance company.
Before you buy a new home, talk with your agent about the best ways to save on home insurance without sacrificing coverage. These tips will help you protect your most significant investment and get the most value for your dollar.
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