Consider Raising Your Deductible
Insurance companies recommend a high deductible because it can save you money. For example, your yearly premium is $1,500, and the average deductible in your state is $3,000.
Then by switching to a higher amount of deductibles (let’s say $5,000), you could be saving as much as 25% on your premium.
Most people have separate deductibles for the area they live in. For example, someone living near coasts with wind damage or certain states where hail storms are common have separate deductions from their total insurance policy costs.
Analyzing what kind of damage your home may be prone to and separating a deductible accordingly may also help to add on to savings in an average home insurance cost plan.
Know Your Rebuilding Costs
People often mistake the cost of their entire home for the cost of building. The land under your home doesn’t come under rebuilding costs. Be sure to plan your budget accordingly.
If you have a higher rebuilding budget, you may get a higher quote on your insurance premium. Calculate wisely!
Invest To Make a More Secure Home
You can avoid paying an arm and a leg for home insurance by installing some safety devices, such as deadbolt locks, smoke detectors, or fire sprinkler systems. Some companies even offer up to 20% discounts if you install these security precautions.
However, make sure the security equipment is compatible with what makes sense in your situation.
Improve Your Credit Score
Most insurers use your credit score to determine your insurance costs. The higher your credit score, the lower your premium.
How can you improve your credit score?
Pay your bills on time, consistently
Limit submission of new credit applications
Review your credit reports, check for errors
Avoid closing accounts that have been paid off
Keep your credit utilization rate equal to or below 30%
Ask for Discounts
Do your homework and find out all the discounts your insurer is providing. Insurers can cut down your costs for a wide variety of reasons, such as:
No smokers in the house
Recently constructed home
Premium payment automated via banks
Modernized plumbing or electric systems
Upgraded roofs or windows in the past year
Newly installed smoke detectors and fire extinguishers
Make sure you get every discount that applies to you.
Don’t Claim for Small Losses
Filing claims excessively can increase your rates. Calculate the cost of paying out of pocket against the impact of that claim on your premium before paying claims.
Even the smallest of claims will be compensated. But most insurers provide discounts if you are claim-free for a certain number of years.
Find the Right Coverage
Don’t over-insure your belongings or your home.
Insure your home for the cost it would take to rebuild, not on the market value. Chances are the rebuilding cost will be lower, and it’s also the one you will possibly need.
Your policy will pay only for what you own, no matter how much coverage you get. Most home insurance policies require you to protect your personal belongings for a fixed sum based on the value of your house without considering how much you may need. This can lead to over-insuring and hence over-paying.
However, make sure you don’t under-insure as well. Not getting enough coverage can put you in great financial difficulty in the case of an accident, damage, or liability.
Get Rid of Risky Items (if you can)
Discard any pools, trampolines, or other equipment that are no longer in use. Insurers consider these items a liability risk as people might get injured using them, and you can be held legally liable.