For many people, home insurance may seem like a costly precaution year after year. It could even put a strain on your annual budget if you don’t have the right policy for you. However, it’s possible to reduce the cost of your home insurance premium considerably if you know where to cut costs.
These seven tips will help you identify which aspects of your policy you may need to modify in order to reduce your rate.
1. Increase your home insurance deductible
Your homeowner's deductible is the amount of money you are prepared to pay for a claim before your provider’s coverage is applied. If the cost of your premium is higher than you’d like, raising the dollar value of your deductible is an easy way to reduce the risk to your insurance provider — and reduce your premium. For example, if your deductible is currently $500, raising it to $1,000 can make a really big difference to your annual premium.
While a higher deductible may seem like a large amount to pay on a claim, the reduction in your premium may be worthwhile for you. The important thing is to make sure you have the funds to pay out should you need to make a claim. Home insurance is a way of sharing the risk of owning a home. Your deductible is an indication of how much of that risk you're willing to assume.
2. Combine home and auto insurance
Consider bundling your home and auto insurance from the same provider if you can find one that offers you the right deal. When looking for affordable home insurance quotes you'll find that many providers offer discounts of up to 15% should you purchase at least two types of insurance coverage. However, you should still shop around and make sure the combined cost is lower than what you’d pay for separate policies from different companies.
3. Ask for a discount
There may be discounts available to you if you ask for them. For instance, you may be able to claim a discount on your premium if you have an alarm system installed or if you have additional fire detection systems in your home. Things such as fire extinguishers and deadbolts can also earn you a discount. Some insurance providers offer discounts to seniors or people over a certain age as well.
4. Don't purchase what you will never need
There’s not much use in purchasing coverage for risks and perils that will likely never affect your home, such as earthquake or volcano coverage in an area where this kind of natural disaster could never occur. Alternatively, if you don't possess any valuable jewelry, it wouldn’t make sense to increase your base coverage with an endorsement.
5. Make your home more resistant to damage
It's a good idea to ask your home insurance provider about the measures you can take to protect your home and lower your rate. For example, replacing a roof that is more than 20 years old may reduce the risk of damage during a heavy storm, which could help lower your premium. Also, updating old heating systems or outdated electrical wiring can reduce the risk of fire in your home along with your insurance premium.
6. Be mindful of your policy renewal date
Every year, just before you renew your home insurance, it’s a good idea to review your current policy. If you find anything that is out of date, call your provider and tell them about the changes in your circumstances. This could lead to a reduction in your overall premium and will ultimately ensure that your coverage is valid and up to date.
7. Avoid additional risks
Some home insurance providers are wary of certain kinds of risks. Owning dangerous pets (certain dog breeds, domesticated wild animals, poisonous reptiles, etc.) can increase your insurance costs. Home improvements, such as swimming pools, hot tubs, and trampolines, can also increase your costs because of the increased risk of injury. Make sure that you read the small print in the "Conditions" section of your policy and look out for any exclusions or high-risk designations that could ultimately raise your insurance premium.
You may find that you can reduce your premium by following these simple tips and by shopping around for cheaper home insurance rates. Alternatively, talk to your broker to see what home insurance rates might be available to you, especially after enacting these improvements.