From our article yesterday, you might have realized that a number of the factors that affect your insurance rates are outside of your control. However, there are still steps you can take to lower your rates and save money on homeowners insurance!
Save Money on Homeowners Insurance
Shop Around for Quotes
Shopping around for insurance is important because costs can vary between companies. You can save anywhere from a few hundred dollars up to a thousand just by getting a few options.
Talk with friends and family for recommendations. Who provides their home insurance? How long have they done business with them? Are they happy with the company? Have they ever had to make a claim and how was the experience?
The downside to shopping around is that it can take quite a bit of time. You have to call, or go online, and provide detailed information to every company you want to obtain a quote from, but there’s a better way! Just call us at 724-929-2300 and let us compare pricing for you. We work with some of the biggest names and will do all the work of shopping around for you to get you the best price on the right insurance faster.
When it comes to choosing your insurer, don’t consider cost alone. Consider their history of customer service, which will become very important if a tree falls through your living room or your kitchen catches fire. How quickly does each company send out a claims adjuster? Are repairs payed for quickly? How well do their customers rate them?
Raise Your Deductibles
Your deductible is how much money you pay out of pocket when you file a claim with the insurance company. Once you pay your deductible, the insurance company takes over and pays the rest. So, the higher your deductible, the lower your monthly premium will be.
While this can save you money in the short-term, it can be a costly mistake if you don’t have at least the amount of your deductible in your savings should a claim occur.
For example, raising your deductible from $500 to $1,000 can save you as much as 25% on your premium, however, if you don’t have at least $1,000 put away to pay your deductible, then you will be stuck if something happens and you have to file a claim.
Improve Your Credit Score
The higher your credit score, you are considered less likely to file a claim.
It’s a good idea to find out your credit score before you start shopping for insurance; this way you won’t be hit with any surprises when you start talking to agents. You can check your score once annually without damaging it and some credit card companies now offer a report on each statement.
Don’t Sweat the Small Stuff
Many homeowners don’t file claims for small repairs because they’re afraid it will raise their premium over time. Despite this thought, Consumer Reports found that 57% of homeowners who filed a claim under $5,000 saw no premium increase. Those that did see an increase reported that it was less than $200 per year.
Of course, an increase in the cost of premiums after a claim varies depending on the company and the cost of the claim.
This knowledge can save you quite a bit of money down the road. For example, if you know that your premium won’t go up for a small claim, it makes more sense financially to get the insurance company to pay for that water damage from a leaky pipe.
The Right Amount of Coverage
It’s important to make sure you have the right coverage. You don’t want to pay for coverages you don’t need, but you also don’t want to find out that you are underinsured after a claim hits. Approximately 60% of all homes in the U.S. are underinsured by 20% or more. This is why it’s so important to talk to your agent every year to make sure that your coverage is adjusted to meet your changing needs.
For example, imagine that your home burns to the ground. Although you paid $200,000 for your home, it’s going to cost significantly more to rebuild it because labor and material costs have gone up since you took out your policy. It’s now going to cost at least $300,000 to rebuild – but your policy only covers a rebuild of $250,000.
An umbrella policy is another option and will cover your financial needs if they go past what your current policy covers.
For example, if someone falls on your property and decides to sue, or your teenager crashes through the garage and into your living room, you’re off the hook for the damage. On average, an umbrella policy costs a couple hundred dollars a year, and it will ensure that you’re not damaged financially if a major claim falls outside the scope of your homeowner’s insurance.
Bundle Your Policies
Most companies offer discounts when you bundle multiple policies with them. The discounts vary but can add up to a few hundred dollars off.
Ask About Other Discounts
Insurance companies provide discounts for a number of circumstances. Here are some discounts you might qualify for that will help you save money on homeowners insurance:
Gated Community Discount:
If your home is in a gated community, you might receive a discount, since it’s less likely to be robbed. Average discounts range from 5-20%.
If you don’t make any claims in 10 years, you can save up to 20% on your home insurance. Of course, this means you have to commit to one company during that stretch of time and not make a single claim; however, some people actually make it to this discount.
Homeowner’s Association Discount:
If you live in a neighborhood with an HOA, you could get a discount of 5-10%, because insurers see these communities as less risky.
If you smoke, you’ll pay more for home insurance because of the added risk of fire. Nonsmokers may qualify for a discount of up to 15%.
Water Sensor Discount:
Water sensors can detect leaks before they turn into full-blown floods. You can purchase passive or active sensors at most home improvement stores. Once installed, you may qualify for a discount of up to 10%.
There are plenty of renovations you can do to increase your home’s value, but there are also some that will lower your home insurance premiums too.
A new roof for example, could cut up to 20% off your home insurance premium. Improving your home’s wiring or plumbing could save you an additional 10-15%. However, renovations such as adding a new room could raise costs significantly, since your home would cost more to rebuild if it were damaged.
Before you do any major renovation to your home, talk to your insurance agent to find out how your insurance rates will be affected.
Consider Insurance Costs Before You Purchase a Home
When people are buying a home, they analyze the quality of the construction, the flow of the home, and the local community. The cost of insuring it is often the last thing on their minds.
However, before you buy a home, it’s important to consider these costs. Higher premiums will add to the costs of owning a home, and if your budget is already thin, it can lead to financial ruin.
So, what should you look for?
Is the Home Brick or Wood?
Brick homes often have cheaper premiums.
Is There a Security System?
If so, you’ll pay 5% less, on average. A top-notch indoor sprinkler system could save you as much as 20%.
Is There a Pool?
A backyard pool may be fun, but it can raise your premium significantly. So can other dangerous items, such as trampolines.
Is the Home Located on a Busy Road?
If so, there’s an increased risk that a car will skip the curb and hit your home so, you’ll likely pay more.
What Are the Crime Rates in the Neighborhood?
Contact your local police department to find out the rates of home burglary, property damage, and theft.
How Old is the Home?
New construction means lower premiums.
How Old is the Roof?
The newer the better here. If the roof is made of fire-resistant material, such as asphalt, rubber, or metal, it will save you even more.
Is the Home in a Flood Zone?
Even if the area is not officially classified as a flood zone, it’s still important to talk to city officials to find out if the area has flooded in the past. For more information on flood insurance, click here to read our article.
Is the Home in a Hurricane Zone?
If so, does the home have storm shutters, hurricane siding, and a roof that is up to code? These features will help your home withstand the high winds and flying debris in hurricanes, and you’ll pay less for insurance as a result.
Have You Seen the C.L.U.E Report?
The Comprehensive Loss Underwriting Exchange (CLUE) is a database that details every home insurance claim that’s been made on the home. Homes with a lot of claims in their history will cost more to insure.
Does the Home Have New Wiring?
An older home with new wiring is less of a fire hazard, and you might get a discount of up to 10%. The same is true of new plumbing; updates here will cut insurance costs.
Insurance might not be the most exciting topic in the world, but it’s one of life’s necessities. No one wants to pay more than they have to, but these tips can help you save money on homeowners insurance. It is definitely worth the time and energy to find the right coverage at the best price. That’s where CSC can help! Call us today for a free quote or account review and let us save you time and money!