Save on Home Insurance With These Tips

Home insurance costs are increasing. Supply chain issues due to the pandemic, labor shortages in the construction industry, rising inflation and increasing natural disasters are all contributing. And experts assume that this trend will continue.

However, there are ways to ensure you pay the lowest possible rate while remaining fully protected. Here are some tips to save on home insurance.

Don’t drop the cover to save money

Dropping coverage to lower your premium can save you some money in the short term. But when disaster strikes, you’ll have to foot the bill when it comes time to rebuild your home and replace lost items.

Home contents insurance protects you from having to pay expensive costs out of your own pocket. “You’re insuring your home for the repair and rebuilding costs,” says Carole Walker of Denver, executive director of the Rocky Mountain Insurance Information Association. “It’s one of the most important financial investments you’ll make.”

You should also avoid dropping other necessary policies beyond homeowners insurance, such as: B. Flood insurance from the National Flood Insurance Program. Instead, try getting quotes from private insurers. You may find a cheaper option.

Walker also encourages homeowners to communicate regularly with their insurance agent or company. Provide as many details as possible about your home and belongings to ensure you are always fully covered.

Increase your deductible

Increasing your deductible, the amount you pay when you make a claim, is a guaranteed way to lower your homeowners insurance premium. But only do this if you know you have enough cash on hand to cover the higher amount in case something happens.

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If you’re unsure about increasing your deductible, consider how much you would pay in a situation where you might want to make a claim. For example, if your deductible is $1,000 but you could pay up to $2,500 out of pocket for home repairs or lost items before contacting your insurer, consider increasing your deductible to $2,500.

Ask about discounts

Most home insurance companies offer a variety of discounts, so check with your agent or insurer to see if you might be missing out.

“Bundling your policies together is a great way to save,” wrote Brian Pattillo of Westlake, Texas, Goosehead Insurance’s vice president of strategy, in an email. Some insurer websites state that homeowners who combine auto and home insurance can save 20% to 30%.

Depending on where you live and what insurer you have, discounts might also be available for:

  • Sign up for paperless invoicing and automatic payments.

  • Installing security devices such as latches and security systems.

  • Have smoke detectors and fire extinguishers in the house.

Build your credit

Insurers in most states use a credit-based insurance score to set rates. Using credit to set insurance prices for homeowners, renters, condos, and mobile homes is not permitted in California, Maryland, and Massachusetts.

Because of this pricing model, a person with bad credit will pay an average of 76% more for home insurance than a person with good credit in most states, according to Quadrant Information Services’ 2022 NerdWallet analysis of home insurance rates.

You can build your credit by consistently making payments on time and keeping your credit utilization rate below 30%.

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Avoid filing petty claims

Home insurance premiums tend to increase after a claim, so avoid filing small claims if possible.

Suppose a storm crashes a branch through your living room window. The cost of repairing the window is $1,300 while your insurance deductible is $1,000. If you make a claim, your insurer will pay out $300, but your insurance premium will likely go up. If you can afford that amount, skip the claims process and pay for the repairs yourself.

“Save homeowners insurance claims for bigger unexpected, sudden losses,” says Walker.

Take steps to protect your property

You can usually save on home insurance by protecting your home from certain hazards.

Natural disasters can cause extensive damage to your home. So if you are at risk, take steps to protect your home. For example, if you live in an area prone to wildfires, you should remove anything combustible within 100 feet of the home and pack the eaves with noncombustible materials. If your home is prone to strong winds, installing windproof windows can reduce damage from hurricanes.

You can also lower your premium if you protect your home from theft. Some insurers offer discounts for installing qualified security systems and other protections such as deadbolts. If you make home upgrades, let your insurer or agent know.

shopping spree

Looking around and comparing home insurance quotes from multiple companies is the best way to find the cheapest rate.

Insurance comparison portals can streamline the shopping process, but you can also get quotes directly from insurance companies on their websites.

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Or, if you want to save time, work with an independent agent.

“An independent broker can create multiple quotes from different insurance providers at the same time, providing an unbiased opinion,” Pattillo wrote in an email.

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Ben Moore writes for NerdWallet. Email: [email protected].

The article Save on home insurance with these tips originally appeared on NerdWallet.