How You Can Save Money When Buying A Homeowners Insurance Policy
The cost of your homeowners insurance can differ by several hundred dollars-depending on the insurance company you use and the size of your house. Here are a number of strategies that can assist you to save money when buying homeowners insurance coverage:
Get several quotes
The prices of homeowners insurance policies differ from one company to another and therefore it makes sense to shop around. Find at least three insurance price quotes. You can also contact the insurance company directly on phone or go online to get the information. The insurance department of your state government can give you comparisons of the prices charged by various established insurers in the state.
Assess the financial condition of the insurance companies you are considering by looking at their ratings as provided by independent rating firms and consumer magazines.
Obtain several quotes from various types of insurance companies. Some of them use their own agents (who use the same names as the companies) while other companies engage independent agents. There are also those companies that prefer to sell directly to their customers through the internet or over the phone.
However, you need to do more than just shop for a great price. You must ensure that you get a company that responds to your questions promptly and deals with claims efficiently and fairly. Get in touch with your state insurance department and see if they can provide you with an analysis of consumer complaint ratios that are categorized by company.
Choose a company representative or agent who invests their time in answering your questions. Bear in mind that this is the company that will handle your emergency or accident
Increase your deductible
A deductible is the amount that a policy holder has to pay before the insurance company begins to pay its share. Paying a higher deductible means you pay less on your premium. Try to pay a deductible of not less than $500. If possible, increase it to $1,000 and you might save up to 25 percent.
If your home area is disaster-prone, your insurance might contain a separate deductible to cover damage as a result of disasters. If your home is next to the East coast, you might have a windstorm deductible and if your state is prone to hailstorms your policy might contain a hail deductible. If you stay in an area that is prone to earthquakes, your policy might have an earthquake deductible.
Use one insurer when buying your home and auto insurance
The majority of companies that deal in homeowners insurance also sell umbrella liability insurance and auto insurance. Umbrella liability policies provide additional liability coverage above the limits of other policies. A number of insurance companies will lower your premium by up to 15 percent when you buy more than two policies from them. But you need to ensure that the combined price that you pay is less than purchasing individual insurance coverages from various companies.
Invest in disaster preparedness
Ask your insurance company representative or insurance agent what measures you can take so that your home is less vulnerable to storms and other natural catastrophes. You can save money on premiums by adding shatter-proof glass and storm shutters, strengthening your roof or purchasing tougher roofing materials .If your home is older, you can upgrade it so that it can resist earthquakes. You can also modernize your plumbing, electrical and heating systems in order to minimize the risk of damage due to water and fire.
Ignore out the cost of land when making valuations
The land on which your house stands is not under risk of fire, theft, windstorms and other hazards that are covered by your homeowners policy. Therefore do not consider its value when determining the amount of homeowners insurance that you want to take out. If you include it, you will end up paying a higher premium unnecessarily.
Check if you can get discounts after installing home security devices
Normally, you can get a discount of not less than 5 percent for installing a burglar alarm, deadbolt lock or smoke detector. A number of companies can reduce your premiums by up to 20 percent if you fit a state-of-the-art sprinkler system and a burglar and fire alarm system that alerts the police, firemen and other monitoring services. But these systems can be costly and some of them may not even qualify for a discount. Before purchasing any of these devices, find out which type your insurance company recommends, how much it would cost and what you would save on premiums.
Explore other discount options
While most insurance companies provide discounts, they do not give the same kinds of discounts or the same amount of discount in every state. Discuss with your insurance company or agent about the discount options available to you. For instance, if you are 55 years old and above, you might qualify for a 10 percent discount at some insurance companies. If you have totally modernized your electrical or plumbing system in the recent past, some companies might offer a price reduction.
Tap into group coverage
If your employer administers a group insurance program, find out if it has a homeowners policy that has better terms than you can get anywhere else. Furthermore, alumni, business and professional groups can provide an insurance package at a discounted price.
Look for long term relationships with insurers
If you have used the same insurance company for a number of years, you can get a discount because of being a long-standing policyholder. There are insurers who will lower premiums by a margin of five percent if you stick with them for 3 to 5 years and by 10 percent if your policy lasts for six years and above. To make sure that you are getting a great deal, occasionally compare their prices with those of their fellow insurers.
Conduct an annual re-evaluation of your assets
Your policy should cover any additions or significant purchases in your home. Nonetheless, you do not want to spend your hard-earned money on unnecessary coverage. If the $5,000 fur coat you bought five years ago is no longer worth that money, it will be in your best interests to slash or cancel your floater(the additional insurance for items that are not covered by regular homeowners policies) and use the money you save on other things.
Consider getting private insurance if you are under a government plan
If your home area is prone to fires, crime or storms and your homeowners insurance is under a government plan, ask your state insurance department or insurance company representatives and agents if there are other options out there. You might discover that there are measures you can take that will enable you to buy insurance at a reduced price from private companies.
Think seriously about the cost homeowners insurance when purchasing a home
The cost of your homeowners insurance will partly depend on the rebuilding cost of your home and the chances of it burning down or being destroyed by natural disasters. You can pay less money for insurance if you purchase a house that is near a fire hydrant or where the community has a professional (not volunteer) fire department. You can also be charged less if your home’s plumbing, electrical or heating systems are not more than ten years old. If your home is in the eastern part of the country, think about getting a brick house since it resists wind better. Those who live in earthquake prone areas should go for a wooden frame house since it is more likely to survive earthquakes. Making a wise selection on such issues can reduce your premiums by between 5 percent and 15 percent.
Note that earthquake and flood damage are not covered by your regular homeowners policy. When you purchase a house that is in an area that is prone to flooding, you will need to pay for a flood insurance policy for roughly $400 annually. The website of the National Flood Insurance Program has helpful information relating to flood insurance. Many insurance companies offer separate earthquake policies. The costs of such policies depend on the construction features of your home and the probability of getting an earthquake in your area.
In case you have any questions regarding insurance for any of your assets, talk to your company representative or agent. For instance if you operate a business from home, ensure you have sufficient coverage. Many homeowner policies offer business equipment cover for a maximum of $2,500-and they do not provide business liability insurance.