9 ways to lower your homeowner’s insurance rates
It is often overlooked that homeowner’s insurance rates can be more expensive than it should.
The good news? Insurers offer a range of incentives and discounts that can lower your homeowners’ insurance premium.
These are nine ways to save.
Raise your deductible
An easy way to lower your premium is to increase your deductible. This refers to the amount that you will pay if you file a claim. NerdWallet’s rate analysis shows that a $1,000 deductible could result in a savings of around 12% each year.
You can put money in your pockets every month by increasing your deductible. This is an additional source of income that would otherwise have gone to your insurance company. You should make sure that you have enough cash to cover an additional out-of pocket expense in case you need to file a claim.
homeowner’s insurance rates Secure your home
You can save money on home security by doing the basics. Mark Friedlander, spokesperson from the Insurance Information Institute, said that a smoke detector, burglar alarm, or deadbolt lock can help you get a 5% discount. According to Friedlander, adding a comprehensive sprinkler system in conjunction with an actively monitored fire alarm or burglar alarm could help you save as much as 15%-20%.
Do not make small claims
While it might seem appealing to file a complaint with your insurer even for minor incidents, you may find yourself better off if these expenses are paid out of pocket. Some insurers offer discounts if your claim is not filed within a specified time frame, usually for a few year.
How much does filing a claim for wind damage affect your rates? According to NerdWallet, wind damage claims can raise your annual cost of insurance by around 9%. An additional 19% increase in your annual rate will result from a water claim. You could pay more for rate increases if you have a small claim.
Ask about lesser-known discount
It is possible to miss out on other savings if you don’t check. Insurers offer homeowners insurance discounts for those who:
- You must not allow smokers to live in your house.
- Just bought your first home.
- Automated bank payments allow you to pay your premium.
- You can opt for paperless billing.
- A career in teaching, engineering, or firefighting is possible.
Make sure to budget for home improvements
Without even realizing, homeowners insurance discounts may be available to you if your home has been improved. You could save money on insurance by installing storm shutters and impact resistant roofing. These features make your house more resilient to damage. An upgrade to your electrical and plumbing systems can also help you save money.
Jessica Hanna, spokeswoman for American Property Casualty Insurance Association says “You can often ask for a new inspection on your home to evaluate those improvements to maximize your potential discount.”
Bundle auto and home insurance
The Insurance Information Institute data shows that bundling auto and homeowners insurance with one company can help you save 5% to 15% on your homeowner’s premium. While it may vary depending on which company you work for, many insurance companies offer discounts to customers who purchase more than one type.
Improve your credit score
You may be surprised to know that your credit score can significantly impact your home insurance premium. In most states, insurance companies can use credit-based scores to determine your rates. You may pay more if your insurance company considers your credit score too low (e.g., a FICO score of less than 630).
Check your credit report carefully if you notice a low credit score. By paying your bills on-time and reducing credit card debts, you can improve your score. Learn how to build credit.
Reduce high-risk material
Your homeowners insurance premium could increase even though you may enjoy it.
An attractive nuisance is something that children may be tempted to do on your property. You could be held legally liable if your children are injured in this way. This is a risk that insurers view as a liability. Getting rid of these items can help save you money on homeowners’ insurance.
The rates of homeowners insurance can differ widely between companies. NerdWallet research shows that homeowners could save as much as $1,000 per year by choosing the lowest rate.
Many companies offer tools that let you quickly compare home insurance quotes and input basic information. You can compare rates of different companies and see how much you could save by switching to another insurer. An independent broker or insurance agent can also shop around for you.