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Home insurance is usually required when applying for a mortgage to buy a home. It is also a way to protect yourself financially from loss or damage to a house or related property. The cost of home insurance will depend on a variety of factors, but there are several steps you can take to lower your premiums. This page gives some suggestions on how to save money on home insurance.
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Introduction
- Home insurance can cost a significant amount of money, especially since it's usually a cost you will have to pay for many years. Since home insurance usually do not cover natural disasters, you might also need to buy extra insurance, such as flood and earthquake insurance. Fortunately there are ways to save money on home insurance.
Step 1: Shopping Around
- The first step to find affordable home insurance is to shop around for a good rate. Just make sure you are also getting a decent coverage from an insurance company you can trust.
- There are several tools available to check the financial stability of a company, such as A.M. Best and Standard & Poor. Use them before making a decision.
- Check with the state to find any consumer complaints filed against the company.
- There are several online services that provide free insurance quotes.
Step 2: Before Buying a House
- If you plan ahead, you can lower the cost of home insurance before even buying a house. The location and standard of the house impact the rates of the premiums. The cost of home insurance is only one factor to take into consideration when buying a case, however, most of following issues can also impact other factors such as safety and a future need for renovations.
- Insurance companies typically offer lower rates for houses near fire stations.
- If the electrical, heating and plumbing systems are less than ten years old you might also be able to get discounts.
- Take a look at the CLUE (Comprehensive Loss Underwriting Exchange) for the house. It will show the previous insurance claims for the property, if any.
Step 3: Renovating a House
- If you already own a house, you might be able to reduce your premiums by renovating your house. Similar to the steps mentioned above, this can also result in a safer house.
- A newer heating, gas or plumbing system might lower premiums.
- You can usually get a discount for adding a burglary alarm or smoke detector.
- If you are planning to make renovations or improvements to your house, consult your insurance company to see if there are any steps you can take to reduce your premiums in the process.
Step 4: Other Factors
- There are several other factors which will impact how much you pay for insurance.
- Purchasing home and car insurance from the same company can result in lower rates, but not all insurance companies offer both.
- Don't include the value of the land under the house when purchasing a home insurance policy, since the land cannot be stolen or lost.
- Maintain a good credit record.
- Like most types of insurances, you can lower your monthly premiums if increasing your deductible.
- Many insurance companies offer other discounts based on the likelihood of fires, thefts, accidents and other factors and your likelihood to notice them. For example, seniors sometimes get discounts because they are more likely to notice fires and non-smokers can get discounts because they are less likely to start fires.
- Review your policy on a regular basis. Purchases and renovations can result in a need to increase your coverage. Sale, loss, damage or just simply the passage of time will lower the value of other items, thereby reducing your need of coverage.
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