How to Save on Your Home Insurance
How to Pay Less on Homeowner & Renter Insurance
Here are numerous ways to slash the cost of your homeowner's and renter's insurance. A wide variety of discounts are available, ranging from the type of building material used to build your home to how close you live to a fire station. These discounts will vary by state and insurance company:
- Shop around. Check with several different home insurance companies to get rate quotes (an independent insurance agent can provide rate quotes from a variety of companies). Do your friends or family members like their home insurance company?
- Raise your deductible. The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Typically, home insurance deductibles start at $250. Increase your deductible to:
- $500 and save up to 12 percent on your premiums.
- $1,000 and save up to 24 percent.
- $2,500 and save up to 30 percent.
- $5,000 and save up to 37 percent.
- Make sure you can afford to pay the higher deductible out of pocket if something should happen.
- Buy your home and auto policies from the same company. Many companies will give a multiline discount if you buy both home insurance and auto coverage from them.
- Consider insurance when buying a home. If you're looking at buying a home, think about the cost of insuring the home. A newer home's electrical, heating, and plumbing systems and overall structure are likely to be in better condition than those of an older home. This can lead to a discount on your premiums. You'll also want to consider the construction of the home and where you live. If you live on the Atlantic Coast, you'll want the house to be able to stand up to wind damage, floods and tornadoes in the Midwest, and earthquakes and wildfires on the Pacific Coast.
- Insure your home, not the land. While your home and its contents are at risk from fire, theft, windstorms, and other perils, the land your home sits on is not. Don't include the value of the land in deciding how much home insurance you need to buy. Your agent can help you assess the coverage you need.
- Improve security and safety. Items such as dead bolt locks, burglar alarms, and smoke detectors can usually bring discounts of 5% each, depending on the company. Your insurance company may also offer a significant discount of 15% or 20% if you install a home-security system. If you're thinking about buying such a system, check with your insurer to see which systems qualify for a discount.
- Stop smoking. Smoking accidents account for more than 23,000 residential fires every year. Some insurers offer to reduce premiums if no one in the home smokes.
- Look for senior discounts. Insurance companies have found that retired people stay at home more and spot fires sooner than working people. Older people also have more time for maintaining their homes. If you're at least 55 years old and retired, you might qualify for as much as a 10 percent discount.
- Look for group coverage. Large employers and alumni and business associations often work out insurance deals with an insurance company, which includes a discount for employees and members.
- Stay with an insurer. If you've kept your coverage with a company for several years, you may receive special consideration. Several insurers will reduce their premiums by 5 percent after you stay with them for three to five years; and some companies will discount you as much as 10 percent after six years.
- Check your policy annually. You want your policy to reflect the value of your home and belongings. If you review your policy every year, you will be able to make the necessary adjustments. If, for example, you just sold a valuable painting, you won't to need the same amount of personal property coverage. But if you've added a garage, you'll need to increase your dwelling coverage.
- Look for private insurance first. If you live in a high-risk area — one that is especially vulnerable to coastal storms, fires, or crime — and think you'll be forced to buy home coverage from your state's high-risk insurance pool, check first with an independent insurance agent. You may find that you can still buy insurance at a lower price in the private insurance market than from your state's insurer of last resort.