11 Tips to Save on Home Insurance

Now that you understand the key concepts involved in a home insurance policy, let’s move on to saving you money. Following the tips below can help you get the level of coverage you need for fewer dollars.

  1. Multiple Coverage, One Insurance Company – Do you have auto insurance? If so, is it with the same provider as your homeowner's policy? If not, you’re probably paying too much… for both policies. The vast majority of companies that provide home insurance also provide auto insurance, and they usually offer ‘multi-policy discounts’ to entice you to stick with them for all your insurance needs. In most cases, these discounts are at least 10%, and some insurers may even apply the same discount to all policies purchased with the same company.

  2. Choose a Higher Deductible – The deductible is the amount you pay on a claim before insurance kicks in to cover the remainder. If, for example, you have a $250 deductible and you file a claim for $1,000 in damage to your home, you would be responsible for the first $250 and the insurer would cover the remaining $750. Generally speaking, the lower the deductible you choose, the more you pay in premiums. Of course, you risk more out-of-pocket expenses if you have a claim, but you save on your premium each and every year.

  3. Newer is Better – Most insurance companies prefer newer homes. This is because with a new home, it’s far less likely that something major will go wrong with the heating, electrical or plumbing. Additionally, the structure itself is new and likely to be in far better shape than the structure of an older home. Many insurance providers offer significant discounts to customers with newer homes.

  4. Location, Location, Location – Where you live is another factor that plays a bit part in what you’ll end up paying for home insurance. If you live near a fire station or in a neighborhood with fire hydrants, you should qualify for a reduced premium. On the other hand, if you live in an area that’s prone to flooding, your lender may require you to purchase an additional flood insurance policy that will cost you hundreds of dollars extra each year.

  5. Insure the House, Not the Land – When determining how much home insurance you’re going to need, be sure NOT to include the value of the property your home is sitting on. Nobody’s going to steal the land, and fire or high winds won’t destroy it. Have your Killingbeck Insurance Agent run a replacement cost estimate to determine what it would cost to rebuild your home if it was destroyed. The market value of your land doesn’t matter – if you include the value of your property, you’re paying too much.

  6. Only Insure What You Have – Your homeowner’s insurance policy includes an adjustable protection limit for your personal property. If you don’t need all that coverage, you have the option to lower it to save money. But be careful – you may need more coverage than the standard baseline limit. Also, be sure to pay close attention to any high-value items subject to special limits like jewelry and computer equipment.

  7. Being Safe Saves – Installing devices such as smoke detectors, security alarms, sprinkler systems, and deadbolt locks may qualify you to receive significant discounts on your home insurance. However, different insurance companies offer discounts on different types of security devices, so be sure to check with your provider before you install one.

  8. Non-Smoker Discounts – Along with causing over five million deaths each year, smoking (unattended cigarette butts, etc.) produces over 23,000 residential fires annually in the United States alone. Many insurance providers offer great discounts for non-smoking households.

  9. Loyalty Counts – If you’ve been with an insurance provider for a number of years and you’re happy where you are, stay put. Most companies offer substantial savings for loyal policyholders who have been with them for an extended period of time. For example, 5% for at least three years, 10% for at least five years, etc.

  10. Check Your ‘Dwelling Limit’ – The vast majority of homeowner’s insurance policies include an annual inflation adjustment. This means that the provider automatically increases your so-called ‘Dwelling Limit’ each and every year. Insurance companies do this to keep up with the rising costs associated with home repair, and to make sure your coverage will completely rebuild your home in case of an emergency. This, of course, is a good thing, but over time the Dwelling Limit adjustment can become out of sync with reality. If you think your automatic inflation adjustment is higher than it needs to be, ask your Killingbeck Insurance Agent to run a new replacement cost estimate. You may be able to lower your costs while retaining the same level of protection.

  11. Good Credit = Lower Rates – Most people don’t know it, but many insurance companies use credit history as a big factor in determining your pricing structure. Individuals with better credit typically qualify for lower rates on their yearly premiums. Improving your credit is a good thing to do for so many reasons, just one more of which is saving on home insurance.