Homeowners insurance is something you have to have, and there is no way to dodge this one vital purchase. But, the problem with home insurance is rising premiums.
As Hippo points out, the average annual home insurance premium was $1,984 in 2021. Then, in 2023, this premium jumped to $2,377. Within just a couple of years, home insurance premiums in the US saw a 20 percent rise.
Unfortunately, these premiums will continue going up and through the roof. Home insurance costs are rising like anything: what cost $1,400 back in 2016 will cost $6,000 in 2024. That being said, there is no reason why you cannot try to save money on home insurance premiums. We will tell you how.
Know Your Policy Inside Out
Before you even think about cutting costs, take a good, hard look at your homeowners insurance policy. Do you know exactly what it covers? Many homeowners pay for coverage they do not need or, worse, lack essential coverage because they did not read the fine print. Does your policy cover natural disasters that are common in your area? What about personal property or liability?
If you are shrugging right now, it is time to dig out that stack of paperwork. Think of your policy like a mystery novel. Every clause and term has a reason for being there, and understanding it can lead to the best home insurance decisions.
Who knows? You might find you are paying extra for coverage that does not fit your lifestyle. Why pay to protect a diamond tiara if you do not even own one?
Home Security is Key
Insurance for homeowners is all about risk management. If your house is safer, your premiums will likely drop.
What kind of safety are we talking about? The simplest of measures are security cams, alarm systems, digital locks, and all that stuff. These security measures help make your home less attractive to burglars and more appealing to your insurance provider.
Not only will these upgrades lower your premiums, but they will also give you peace of mind. Data suggests that crime rates have gone down in the US. However, that is no reason for you to ignore the need for top-notch home security. If anything, you should give your home security measures a boost to ensure maximum safety, something insurers will also like.
Raise That Deductible If You Can
You know that amount you pay out of pocket? You know, the one right before your home insurance coverage kicks in? That is the deductible in question here.
Opt for a higher deductible, and you get to lower your premium. It’s simple. Of course, this does have its cons, as a higher deductible is a double-edged sword. You must ensure that you can afford the deductible in the first place if you ever need to file a claim.
It is a bit like gambling but with a safety net. Raise the stakes, and you might save enough on your premiums to make that emergency fund look healthier. But do not go too wild; this is not Vegas.
Shop Around
When was the last time you compared home insurance policies from different companies? If your answer is “never” or “when I bought the house,” it is time to start shopping.
Every insurer calculates premiums differently, so a little homework could uncover significant savings. One company might reward your good credit score, while another values your low-risk neighborhood. You will not know what is out there unless you look and find the best home insurance.
Bundle Up and Keep Your Credit Score in Check
Did you know that bundling can help you save 20 to 25 percent on insurance costs? If you also have auto insurance or other types of coverage, ask your provider about bundling options.
Keep multiple policies under one roof, and insurance companies will not hesitate to offer you discounts (in most cases). Then comes credit score: yes, your credit scores can also impact your insurance premiums. Just for mortgages and car loans? Not really. Credit scores impact home insurance policies just as much.
Insurers take a look at a good credit score and breathe a sigh of relief. They see such a score as a sign of responsible behavior, which, for you, could translate to lower premiums. In fact, the better your credit score, the more chances you have of landing the best possible home insurance rates.
Do Not Underestimate Home Maintenance
A well-maintained home is not just a joy to live in; it is also less risky to insure. Leaky roofs, faulty wiring and ancient plumbing systems are red flags for insurers. Regular upkeep can prevent expensive claims and keep your premiums in check.
Insurers know a good home when they see it, and how exactly do they do that? Simple: they observe how well-maintained the home really is. Hence, if you can ensure proper maintenance of your home, you do not have to worry about paying high premiums.
Drop Unnecessary Coverage and Ask for Discounts
Do you really need coverage for an antique coin collection you do not own? Many homeowners blindly accept the coverage offered without tailoring it to their specific needs. Review your home insurance policy and remove extras that do not apply to you.
Besides, many insurance providers offer discounts for everything from being claims-free to simply being a non-smoker. Do not be shy; ask about every possible discount you might qualify for. Sometimes, all it takes is a quick call to your insurance agent to uncover these discounts.
Invest in Your Home’s Future
Upgrading your home to be more disaster-resistant can also lower your premiums. Installing storm shutters, reinforcing your roof or even opting for modern building materials can make a difference.
Sure, these upgrades might require an initial investment, but they often pay off in both reduced premiums and peace of mind.
Saving money on homeowners insurance is not just about cutting corners. It is about making smart, informed choices that benefit you and your home. By understanding your policy, maintaining your property and shopping around, you can reduce your premiums without sacrificing essential coverage.
So, go ahead and embrace the adventure of saving on your home insurance. It is a bit like finding the perfect balance between comfort and cost. After all, the best home insurance is the kind that protects your peace of mind without draining your wallet.
