In 2019, the industry saw a 3.3% increase in home insurance policy premiums and overall costs. Since home insurance is an unavoidable expense for all sensible homeowners, it pays to look for different ways to minimize the costs of your policy.
Policies can be found for affordable monthly premiums, but extra savings are always appreciated. And if you use these savings tips, you can reduce the amount you’ll end up paying each month for your policy.
Check out these smart savings tips for keeping home insurance costs down:
1. Get the Right Amount of Insurance From the Start
Before you even begin looking into discounts, the right way to keep home insurance premiums to a minimum is to make sure you are getting the right amount of coverage. Paying for more coverage than you need will only add unnecessary expenses to your bank account.
The general rule of thumb is to get enough coverage to pay for the costs of completely rebuilding your home in the event of a disaster. Be sure that is 100% of the property value, not the market value.
2. Comparison Shop
Of course, one way to save money when buying anything is comparison shopping. With convenient online applications, you can quickly and effortlessly draw quotes from multiple insurance policy providers. You can then compare the various rates you are given to find the most competitive plans available for your home. There are even dedicated comparison tools that will generate price quotes for you and put the information into a side-by-side comparison. Instant savings!
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3. Bundle Policies
Another way to get discounts on your monthly home insurance premiums is to bundle your insurance policies. Most insurance providers work with multiple forms of insurance, from auto to travel, life, and of course, home. A common method homeowners use to save money on their home insurance policy is to take out another type of insurance policy with the same policy provider. For example, you might ask your policy provider about details on an auto insurance policy to insure your car. Because you are using the provider for multiple policies, they’re more inclined to give you a better rate on your home insurance policy.
In fact, you can save as much as 20-30% on your homeowners insurance by bundling it with your auto insurance policy. That is quite a hefty sum to be saving each year. It is worth noting, however, that if you are planning on bundling renters insurance with your auto insurance policy, you will not save as much. You’ll still get roughly 8% off on your policies though, so even renters insurance is worth bundling if you can manage it.
4. Install a Security System and Other Safety Devices
This is an easy one. Homeowners can save up to 20% on their insurance policies just by having a home security system in their homes. Why so much? Well, according to recent statistics, 60% of thieves will skip over homes that have a security system installed. So, the insurance providers are working with the probabilities here, assuming that you are less likely to get burgled if you have a system and as such are less of a risk. Therefore, they’re willing to charge you less on your policies as well. This is for monitored home security systems, but even unmonitored security systems will reduce your premiums by roughly 5%.
In addition, other safety measures you take, such as installing smoke detectors, can also net you a decreased rate with some insurers, so be sure to see the provider’s full list of discounts to get the lowest rate possible.
5. Improve Your Credit Score
This next one seems like an indirect causality, but it’s actually one of the most important tips to pay attention to. Why? Because according to the polls, 85% of home insurance policy agencies use credit score as the largest factor when determining how much premium you are going to pay on your home insurance policy. Almost all providers out there are looking at your credit score, it only makes sense to clean up your report. Simple things like paying off small debts, paying your bills on time, or even taking out a small loan (and repaying it responsibly each month) will dramatically improve your credit score.
You can save as much as 91% on your home insurance premiums by having good credit. So, it’s worthwhile for you to strive for a better score.
6. Minimize Claims
Depending on where you live, it is possible your premium could increase greatly after filing a claim. For example, in Maryland or Connecticut, insurance premiums go up by 21% after just a single claim. Other states are more forgiving, like New York and Texas, which only increase your premium by 1% after a claim. Check your policy, and if you live in an area where claims will greatly increase your premium, you should weigh the benefits and costs of making a claim. In other words, if it’s a small claim, it might not be worth filing it because of the amount your premium will increase going forward.
7. Play the Long Game
Home insurance policy providers generally reward loyalty. If you are with the same insurance provider for multiple years consecutively, you may be entitled to a premium discount. While the amount and length of time required to qualify for the discount vary from one provider to the next, frequently insurance providers will offer a 5% premium discount for homeowners who have been with them for 3-5 years. Customers who have been loyal for 6+ years can enjoy as much as 10% off their monthly premiums. While this is a bit of a waiting game, in the end, it really pays off, especially if your premiums are high.
8. Weigh Your Riders
Riders, aka floaters, aka add-ons, are additional policies that you can take out in conjunction with your standard homeowners insurance to cover extra items or increase your coverage limit. Sometimes, these are very worthwhile. For example, if you have an expensive piece of artwork you want insured or if you own heirloom jewelry, a floater can be the insurance policy you need to cover such pricey items. However, sometimes we sign up for riders that we don’t really need, either because the agent we spoke to was very convincing, we didn’t understand the terms, or our circumstances were different when we signed up. Consider your floaters and see if they’re really necessary. If they are, by all means, keep them. But if riders are superfluous, cut ties and save some money.
Affordable Homeowners Insurance is a Reality
Despite home insurance premiums being on the rise, homeowners are still finding affordable policies. Look for a provider that offers reasonable rates, and then implement a few of these smart savings tips to keep the costs of your insurance policy even lower, and you can easily afford the peace of mind that comes from having a safety net on your largest investment.
The Top Home Insurance Providers
HomeInsurance.net is an insurance policy rates marketplace. What that means is that it connects homeowners directly with home insurance companies or agents to help them compare rates on new insurance policies. While not a direct insurance provider, HomeInsurance.Net can help you compare different price quotes, which may lead to finding the most competitive rates for your new home insurance policy. The service is free, so there’s not much to lose. Read the full review.
QuoteWizard has an A+ rating from the Better Business Bureau, a good consumer reputation, and fast online application. This online home insurance marketplace helps homeowners find the most desireable deals they can from home insurance agencies in their area. From bodily injury to property damage liability, it may be covered with a QuoteWizard partner policy. Read the full review.
SaveQuote is an online insurance aggregator, delivering multiple quotes for local home insurance providers. With an easy-access online platform, SaveQuote helps home insurance consumers find the right policies for their needs and budget, without hassle. Read the full review.