It makes perfect financial sense to look for ways to save money on your bottom line. The problem is, finding those “money-saving secrets” isn’t always an easy task. This is especially true when it comes to your insurance premiums. Insurance rules change from company to company and it is hard to pinpoint ways that you can actually save on your insurance. I’m like you. I want answers. So, I went out in search of money-saving secrets for home insurance.
I asked one of our licensed insurance agents and he listed 10 strategies that may save you money on your homeowners insurance. Keep in mind that these tips vary from company to company. It is always a good idea to ask your insurance carrier before spending money on an improvement. Or, find an insurance company that will lower your insurance for that improvement by getting a quote from an insurance agency that can quote you from 15 or more carriers.
1. Wind Mitigation Credit Some insurance carriers will give you a wind mitigation credit if your house is older than 2002 and has an updated roof, or if it is 2002 or newer. In order to qualify, you must have your home inspected by a certified expert wind mitigation inspector. If your home passes, the inspector will give you a certificate saying your home is more likely to withstand strong wind gusts. And, if you live in the State of Florida, insurance companies are mandated to give you reduced rates for certain wind mitigation features. Some of the features that wind mitigation inspectors look at when inspecting your home are: concrete block construction, the presence of gable end bracing, a hip roof, the presence of a single or double roof straps, the presence of a secondary water resistance barrier, or shutter and opening protection. The Wind Mitigation Credit alone could save you up to 45% on your homeowners insurance.
2. Fire and Burglar Alarm Credit There are insurance carriers that will give you credits for fire and burglar alarms if they are centrally monitored. This means that you have a fire and alarm system that rings at the local fire and/or police stations, or other monitoring facility, when activated. Installing a sprinkler system is also beneficial. These systems are not cheap and it is recommended that you check with your insurance carrier first to find out if they offer the discount, how much of a discount you will get and what products/services they will accept as “safe”. Then, do a price check and make sure the discount outweighs the cost. You can also look into discounts for smoke alarms and dead bolts.
3. A A R P, A A A and Senior Citizen Discounts If you are a member of A A R P, A A A or are considered a senior citizen, you could receive discounts from your insurance company. Most insurance companies already quote a senior citizen discount based on your age, but it is always good to call your insurance company to see if they offer it and make sure you are receiving it if they do. Make sure you let the person quoting your insurance know that you are an A A R P or A A A member. If you joined after your policy started, call and have them add on the discount.
4. Accredited Builder Discounts If your home was built by an accredited builder, you could get a discount from your insurance company. An accredited builder is a company that your insurance company deems reputable. Each insurance company has their own list. In most cases, your home has to be newly built in order to qualify. Not all insurance companies offer this discount, so check with yours to find out. If you are looking into building a new home, calling your insurance company and obtaining their list of accredited builders could save you money in the long run.
5. Good Credit More and more insurance companies are giving discounts based on your credit. Maintaining a good credit score will increase your chance of saving money on your homeowners insurance. It is a good idea to check your credit with the different credit reporting agencies a few times a year. Make sure it is accurate and if it is not, follow the steps of disputing claims against your credit. As a general rule of thumb, keep your credit balances low, pay your bills on time and try not to obtain more credit than you actually need.
6. Multiple Policies and Loyal Customer Discount If you purchase your home insurance in conjunction with another policy like flood or auto, you could receive a multiple policies discount. You can save 5% – 15% for having two or more policies with the same insurance carrier. Be sure to price-check first to be positive that a multiple policy is cheaper than individual policies among other carriers. You may even get a discount just for being a loyal customer that has maintained insurance with a company over a period of time. Check with your insurance company to see if these discounts are available and how you can be eligible. If you have maintained insurance with one carrier for several years and are eligible for a loyal customer discount, find out if they offer a multiple policy discount on top of it.
7. Value of House vs Value of Whole Property Some people make the mistake of insuring their entire property, rather than just the portion that could be damaged – the actual structure(s). In the case of a hurricane or tornado, the ground will not be damaged by wind or flood. Make sure that you are insuring your property based on the cost of rebuilding your home and replacing valuables.
8. Increase Deductible Most insurance companies recommend a deductible of $500. But, if you increase your deductible to $1000, you could save up to 25% on your insurance premiums. The deductible is the amount of money you have to pay before the insurance company has to pay on a claim. Remember, different coverages may call for different deductibles. For example, hurricane prone areas may have a separate deductible for wind damage, earthquake prone areas may have a separate deductible for your earthquake policy and hail storm prone areas may have a separate deductible for hail damage. Look at all the possibilities and if you choose to increase your deductible, make sure to keep at least that amount in a savings account in case of emergency.
9. Review Policy Limits We always want all of our possessions covered. But, sometimes values depreciate and we no longer need to pay a premium on an item that was worth $5000 three years ago that is only worth $3000 today. Check the actual value of your treasured possessions and see if you can reduce or even eliminate the floater. A floater is extra insurance that covers valuables not normally covered by standard homeowners insurance such as, high-end computers and other technological devices, expensive jewelry or valuable art work.
10. Shop Around As any good consumer would do to save money, Shop Around. The easiest way to shop around for the cheapest homeowners insurance is to find an independent insurance agency that represents a high number of insurance companies. If your insurance agent can quote you from a base of 15 or more insurance companies, you are more likely to get a better deal if you checked with a small agency that can only quote 5. Home insurance companies often target certain geographical areas and will offer a cheaper rate to those areas. The coverages all are all the same. No one insurance company offers a different coverage than the other. The only difference is service and price. Having a large amount of insurance companies to quote from ensures that you are getting the best possible price.