If your budget is strained and you’re looking for ways to cut back, you may be tempted to reduce your homeowners insurance coverage, but that could be a mistake.
If you don’t have adequate coverage and your house gets damaged or destroyed, or someone gets seriously injured on your property, you may be on the hook for hundreds of thousands of dollars. Fortunately, there are steps you can take to lower your homeowners insurance premiums without scaling back your coverage and putting your family’s financial future in jeopardy.
Bundle Your Insurance Policies
If you currently have your homeowners insurance through one company and your auto or life insurance through a different insurer, you may be spending more than you have to. Insurance companies typically offer substantial discounts to customers who bundle their policies. If you buy two or more types of insurance from the same company, the total you spend may fall significantly, even if you keep your coverage limits exactly the same.
Find Out If You Qualify for Discounts
You may be eligible for one or more discounts on your homeowners insurance. Insurers reward customers who make upgrades that make them less likely to file a claim. For example, you may qualify for a reduction in premiums if you repair or replace your roof, update your home’s electrical system or install a monitored home security system. If you make any of those changes, notify your insurance company and ask if you’re eligible for lower rates. You may also qualify for a discount if you’ve been with your current company for several years.
Raise Your Deductible
Your homeowners insurance premiums are based, in part, on your deductible. If you experience a loss, you’ll have to pay the deductible out of your own pocket before your insurance will kick in.
Raising your deductible may lead to a significant reduction in your premiums. Call your insurance company or agent and ask. You should only raise your deductible if you’ll have access to that amount of money if you need to file an insurance claim.
Shop Around for Better Rates
Switching to a different company is another possible way to save money. You should compare rates from different homeowners insurance companies every year. If you contact other insurers and request quotes, you may be surprised to find that you can get the exact same coverage you have now at a much lower cost from a different company. Even if the insurer you currently have offered the lowest premiums when you bought insurance, another company may quote you a lower price today. You also may be eligible for discounts that weren’t available to you when you originally purchased homeowners insurance.
