9 Ways to Lower Your Homeowners Insurance Rates
Although homeowners insurance is not often given much attention, it could be quietly costing more than it should.
There are many incentives and discounts that insurers offer that will help lower your homeowners insurance premium.
Here are nine ways you can save.
Raise your deductible
You can reduce your premium by increasing your insurance deductible. This is the amount you pay in case you need to file a claim. According to NerdWallet’s rate analysis, an increase to your deductible to $2,500 could help you save 12% per year if you had a $1,000 deductible.
Your deductible increases your ability to keep money in your pocket instead of paying your insurance. If you do have to file a claim, make sure you have enough money to cover the larger out-of-pocket expenses.
Secure your home
Home security can be as simple as the basics. According to Mark Friedlander, spokesperson of the Insurance Information Institute, a smoke detector and burglar alarm can save you 5%. He estimates that a sprinkler system combined with an active monitored fire alarm and burglar alarm can save you up to 15% to 20%.
Avoid small claims
Although it may seem tempting to file a claim with an insurer even if something minor occurs, you might be better off if you pay out-of-pocket for the smaller expenses. This is because many insurers offer discounts for being claim-free for a set period, typically a few years.
How can filing a claim impact your rates? According to NerdWallet’s recent analysis, filing a claim for wind damages can increase your annual insurance cost by approximately 9%. Water claims can increase your annual rate by around 19%. Even if your claim is small, you might end up paying more in rate rises than what the insurer pays.
Ask about less-known discounts
You may not know the other savings that you could be eligible for unless you do your research. If you are a homeowner, some insurers may offer additional discounts.
- Smokers are not allowed in your home.
- You recently bought your house.
- You can pay your premium by automatic bank payments.
- Paperless billing is your best option
- You may work in one of the following careers: teaching, engineering, firefighting, etc.
Home improvements should be planned
You may be eligible for homeowners insurance discounts if you have improved your home. Insurance savings can be achieved by adding features like storm shutters or impact-resistant roofing, which will make your home more resistant to damage. Upgrading your plumbing and electrical systems could also result in a discount.
Jessica Hanna, spokesperson of the American Property Casualty Insurance Association, says that you can request a new inspection to assess these improvements and maximize your discounts.
Bundle your home and auto insurance
According to the Insurance Information Institute, bundling home and auto insurance can save you anywhere from 5% to 15% on homeowners premiums. It could vary depending upon your company. However, most insurers offer discounts for multiple types of policies.
Credit score improvement
Your credit score can have a significant impact on your home-insurance premium, it may surprise you. This is because most states allow companies to use a credit-based score to determine your rates. Your rates may be higher if your insurer considers that your credit score is too low, such as a FICO score below 630.
You can improve your credit score by carefully reviewing your credit reports. Paying your bills on time, and reducing your credit card balances can all help to improve your credit score. Find out how to build credit.
Get rid of high-risk items
Although it might be enjoyable, your homeowner’s insurance premium can increase if you have something that is considered an “attractive nuisance”. This could include trampolines, swimming pool equipment, or playground equipment.
A nuisance is an attractive feature that children might be attracted to. You could be held responsible if they are hurt while playing on your property. Insurers consider these items a liability risk so getting rid of them could help you save money on your homeowners insurance.
Take a look around
Different companies may have different rates for homeowners insurance coverage. NerdWallet research has shown that homeowners can save up to $1,000 per year by getting the lowest rate.
There are many tools available on the websites of companies that will allow you to quickly get home insurance quotes. Compare rates from different companies to see if there are any savings. A broker or independent agent can help you shop around.