Homeowners insurance is a must for new buyers, most importantly because it is required by your lender if you have a mortgage. However, even if your home is owned free and clear, you may not want to take the significant financial risk associated with being uninsured. Insurance rates are a subject of concern for many homeowners, and the cost of insurance for real estate varies dramatically based on a variety of factors.
These factors include the age of the home, its construction materials, its size and value, where it is located, and more. Many homeowners spend well over $1,000 to $1,500 per year on home insurance. With this in mind, you may be looking for a reasonable way to reduce the cost of your insurance. There are several strategies that you can follow to lower your premium, and you may be able to combine multiple methods together for even more significant savings.
Increase Your Deductible
Your home insurance deductible is typically selected by you, but your insurance company may establish a minimum or maximum amount for it. The deductible is paid each time you file a claim against your home insurance policy, so in most instances, you may only pay it once every few years.
A standard deductible is one percent of the replacement value of the home. However, you may increase this up to two percent, set a fixed dollar amount, or choose another option. When you opt for a higher deductible, you will enjoy a lower premium payment. You may be able to call your provider to adjust the deductible today, and you can also request a higher deductible when shopping for a new policy.
Comparison Shop
Another great way to save money on your home insurance is to comparison shop. Property insurance rates vary substantially from provider to provider. Some insurance companies may calculate their rates more or less heavily based on important factors that are highly relevant to your quote, and their rate structure may also vary.
When you comparison shop to at least 3 different providers, you can identify the best overall value. Because rates for property coverage fluctuate periodically, try to comparison shop for new rates periodically at least once or twice per year for the best results.
Take Advantage of Discounts
Many property insurance companies also offer great discounts for their clients to take advantage of, but these discounts are not uniform from provider to provider. Some insurance providers, for example, may give you a great discount if you have special insulation in the home or if you have a security alarm installed. Bundling your car and home insurance policies may also qualify you for discounts. Because there are many discounts available through different providers, it makes sense to shop around to identify the provider with the most discounts that you qualify for.
Adjust Your Coverage
Your coverage types and limits also play a major role in the cost of your insurance. You generally want insurance valued at the replacement cost of your home. Remember that your land does not need to be insured because it can never be destroyed. You also need to pay attention to coverage types. For example, mold coverage is usually an option you can consider, but it can be costly. This and other types of optional coverages should be added to your policy with care.
You may pay your property insurance annually, semi-annually, or monthly. Regardless of how you pay it, it can be a sizable chunk of change in your budget. Many homeowners could save money on this expense by adopting a few savvy strategies. Take time to explore each of these tips thoroughly, and you may be surprised to learn how much money you could save.
