Homeowner's insurance is vital for protecting your investment. Lenders also require coverage if you have a mortgage on your home. For some reason, many homeowners overlook ways they can save money on their premiums. Shopping around is a good idea, but like auto insurance, there are many simple things you can do to impact how much you pay annually to protect your home.
· Raise your deductible. Do you need a low deductible on your insurance policy? Many people can absorb the hit if they go from a $500 deductible to a $1000 deductible, and in some cases, this simple move can reduce rates up to 25%. Deductibles can have a dramatic impact on your premium, so ask your company rep to quote you the difference.
· Don't insure for your home's purchase price. Remember, you don't have to re-buy the land your home is on if you have to rebuild. If you've asked for coverage that includes the land cost and the structure cost, you could be paying far more than you need to pay to protect your home.
· Retired? Seek a discount. If you're over 55 and you're retired, your insurance company may be willing to drop your rate by as much as 10%. A decrease is available because those who are retired are home more often, which reduces burglaries and provides an early warning system for fires.
· Ask for a loyalty discount. If you've been with your insurance company for at least three years, call them up and bring this to their attention. Let them know you're considering shopping for a new policy, and you're curious if they can extend you a discount for being a loyal customer. Savings can range from five to ten percent.
· Adjust your coverage for possessions. You may be insured for more than you own. Individual high-end computers and other luxury goods may depreciate over time. If your policy limits far exceed the value of your possessions, make changes to your policy. The difference can add up. (Do this every year.)
· Purchase home and auto policies from the same company. Insurance Information Institute states that buying two or more insurance policies from the same insurer will often reduce your premium. Most companies that offer homeowners insurance also provide auto insurance. However, make sure to check that the combined price under the insurer is a better price than buying coverage separately from different companies.
· A good credit record. Insurers will use credit information to price insurance policies; therefore, a solid credit history will cut insurance costs. Periodically checking your report is a good idea to check for inaccuracies. If you find an error, the best way to attempt a correction is through a dispute letter. Dispute letters allow you to request a fix by the reporting agency formally. Though it may take a little time to get the errors removed, cleaning up these mistakes can have a direct (and favorable!) effect on your credit score.
Factoring in insurance costs is an essential part of determining how much home you can afford. For more information on how different types of homes can have different insurance costs, talk to me today.