Home Insurance Guide

As an astute homeowner you should always be looking for ways to trim your fixed costs. Since you probably can’t change the terms of your mortgage or how much in taxes you pay, the next best thing is to maintain all the homeowner’s coverage you need at the lowest cost possible. Here are some tips on how to lower your homeowner’s insurance premiums:

1. Don’t Get Coverage You Don’t Need

If you don’t live in a flood plane, you likely don’t need flood insurance. If you don’t live in an earthquake prone area, you also likely don’t need earthquake insurance. That being said, if you are in those types of areas it is not a good idea to skimp on the coverage to save a few dollars. Insurance is there to cover the catastrophic problems, pinching pennies when you’ll get clobbered later is not a good idea. Also, while you don’t live in a flood plane or an earthquake area, you might want to keep the coverage to keep that peace of mind. It’s all about balancing risk and reward.

2. Increase Your Deductible
The deductible is what you must pay out of pocket on a claim before the insurance covers you. If your deductible is $1000 and a thief steals you $2000 television, the insurance company only reimburses you $1000 – the other $1000 is part of your deductible. Increasing your deductible puts more of the risk in your hands and so your premiums will be lower, consult your insurance company to see how your premiums change based on what your deductible is. You may find that increasing the deductible from $1000 to $2000 only saves you $10/month and isn’t worth it to you. Or you might discover it saves you much much more.

3. Multi-policy Discounts
If you get multiple insurance policies from the same insurer you might get a discount. Get quotes for it and compare it with what you’re paying now, remember that all policies (and customer service departments) are not created equal so you may not be comparing apples to apples. Also, some insurers don’t give discounts and they will tell you that up front. For example, Geico actually sends you to Traveler’s Insurance for homeowner’s policies and you get no discount for using both (I have Geico auto and Traveler’s homeowners).

4. Ask About Other Discounts
Perhaps joining a group (or letting them know you’re in a group) can save you percentage points off your bill, it may be worth it to join a group simply for the discount! Also, find out how much of a discount is given for security systems or sprinkler systems, you may find them paying for themselves after a few years. Ask them for what they give discounts for and they will usually tell you.

5. Shop Around!
This is the best tip of all. With the internet and how easy it is to shop around for insurance, you should be comparing rates and services. Remember, cheapest isn’t always best because a few extra dollars for less heartburn when you need to file a claim will be well worth it. Then again, the expensive policies don’t necessarily mean they’re more likely to pay when disaster strikes.