Homeowners insurance provides valuable protection against storm damage, fire, theft, vandalism and other losses. This coverage can protect you from financial ruin, but it can be expensive. Fortunately, there are several ways to reduce your premiums without cutting back on your coverage.
Raise Your Deductible
The deductible is the amount you’ll have to pay out of your own pocket before your insurance company will step in and cover a claim. Raising your deductible can lower your monthly premiums, possibly by a significant amount.
Call your insurance company and ask how much they would charge you if you chose a higher deductible. Before you raise your deductible, make sure that you will have enough money available to cover the deductible if you need to file a claim.
Ask About Discounts
Insurance companies offer a variety of discounts to help their customers save money. You may be able to reduce your premiums by taking steps to make your home safer and reduce the likelihood that you’ll need to file a claim. Installing smoke detectors, deadbolt locks or a home security system, or making roof repairs, may be enough to shave a large percent off your premiums.
If you’re currently getting your homeowners, auto and life insurance from different companies, you may save a lot by bundling, or buying two or more policies from the same insurer. Contact several companies to find out how much they would charge you if you bundled your policies.
Insurers offer discounts for many other reasons. If you belong to a professional organization, for instance, some insurance companies may give you a discount. You may also save money if you work in a particular occupation. Call insurance companies to find out if you qualify for any of these or other types of discounts.
Compare Rates From Different Insurers
Insurance companies often charge very different premiums for the exact same types and amounts of coverage. Even if you compared rates before you bought homeowners insurance and went with the company that offered you the lowest price, it’s a good idea to periodically compare rates. Insurers change the ways they set their premiums, and the company that was the cheapest several years ago may not be the cheapest today.
Improve Your Credit Score
In many states, insurance companies use an insurance score to set customers’ rates. An insurance score is based on much of the same information that’s used to calculate a credit score. Review your credit reports, check them for errors and correct any that you find. Pay all your bills on time and work on reducing your credit card balances and credit utilization ratio. Those actions can improve your overall financial health and can lead to lower homeowners insurance premiums, as well as better interest rates for credit cards and loans.
