Many people don’t think much about their homeowner’s insurance at the closing table. It’s just one more expense of buying a house, another line item on a paper full of numbers. But it is important to know where your money goes — and how to keep more of it. Here are 15 ways to save money on your homeowner’s insurance.
1. Get multiple quotes
When it comes to saving money on your homeowners insurance, savvy shoppers know it pays to get more than one quote. Different carriers can have vastly different prices.
When you get your quote, make sure you are comparing the exact same coverage and deductible to understand the true cost of homeowners insurance.
2. Insure everything with the same company
Many insurance carriers offer substantial discounts when you have more than one type of policy with them. This practice is called bundling, and it applies to everything from life insurance to car insurance.
3. Bump up the deductible
The deductible is the amount that you are responsible for in the event of an insurance claim. A lower deductible means less comes out of your pocket in the event of a loss, but it can cost you every month in your insurance premium. Ask your insurance provider how much money you can save at various deductible levels.
4. Re-evaluate your current coverage
At the very minimum, take a look at your insurance coverage annually (usually when you get your annual statement). Look at what’s covered, including:
- Total home replacement
- Rental housing reimbursement
- Coverage of personal possessions
- Personal injury
- Specific exclusions (what’s not covered)
You may not have as many personal possessions as when you first got coverage, or the value of them may have dropped. In either case, you may find places to cut costs and lower your premium bill.
5. Separate the land from the house
When it comes to declaring a home a total loss and rebuilding, it saves money to leave the land out of it. You may have purchased a home on ten acres, but that ten acres is not at risk of total loss, so don’t insure it.
Of course, if you have a business or any outbuildings on that land, check to make sure they’re covered in the event of loss. Otherwise, insure just the house, not the land.
6. Add a security system
In areas where property theft is high, it can pay to add a security system. Many insurance carriers cut their rates significantly depending on the level of security.
But preventing burglaries and break-ins isn’t the only thing they offer a discount for. To get the biggest deduction, consider also adding:
- Fire alarms
- Sprinkler systems
- Exterior cameras
7. Evaluate the safety of your systems
Old electrical wiring and damaged heating systems cause some of the most destructive home fires. And old plumbing? Cracked and leaky pipes can allow water to seep into your home undetected for years.
Replacing these systems is work that needs to be done regardless, but check with your insurance carrier to see if this cost of homeownership might get paid back over time in lower monthly premiums.
8. Replace your roof
If your roof has outlived its warranty but is showing signs of wear, check with your insurance company to see if they provide a reduced rate for a new roof.
9. Protect against disaster
Some states have elected not to extend new coverage to homeowners due to the rising costs of inevitable natural disasters. Even if yours is not one of them, do everything you can to protect your biggest investment against disaster.
Add storm shutters and roof reinforcements to guard against wind-driven damage. Seawalls and other barriers help keep water away from your home when waters surge. If you are in an area prone to wildfire, follow best practices when it comes to protecting your home in case of a conflagration.
10. Mind your credit
These days, most insurance companies check your credit score before offering protection. This practice became common in the early 1990s and can be a big barrier to those with poor credit. There are companies who offer insurance without checking credit, but they may also have higher rates to protect against default.
11. Build a relationship
It costs insurance companies money when customers leave after just a short period of time. Because of this, many of them offer incentives for those who choose to stick around for a long time. It doesn’t hurt to build a relationship with the business that is ultimately responsible for issuing a check for repairs when disaster strikes.
12. Buy a better home
The best time to think about homeowners insurance is when you are looking for a home. The type and location of the home can raise or lower your rates. Older homes sometimes come with higher rates, and homes in areas where natural disasters are common are certainly going to cost more to insure.
Looking to buy a fixer upper in one of those disaster-prone areas? It may already have an open insurance claim on it which can slow down the sale and make insurers reluctant to provide coverage.
13. Get more discounts
Most insurance companies offer standard discounts for bundling types of insurance, but some go even further. Ask about other discounts, including those for retirees, veterans, and teachers. Insurance companies may also offer benefits to people who are members of certain organizations. Take the time on the phone with your representative to find out exactly which discounts you are eligible for.
14. Don’t sweat the small stuff
If your deductible is $500 and you submit a claim for $1,500, that’s sweating the small stuff. Insurance companies who have to continually pay small claims on the same property may raise your rates. If you can get help fixing minor damage without informing your insurance company, do it. That’s another form of sweat equity in your home.
15. Maintain your home
Practicing regular home maintenance improves the overall condition of your home and may prevent minor issues from becoming major damage. Maintaining your home also reduces the chance of an expensive replacement when a repair will do just fine.
Make every penny count
Buying a home is a great way to build generational wealth, so make every penny count. From saving money at closing to getting the best homeowners insurance rates, these tips to get the most bang for your buck can add up to big savings over time.
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