4 Tips To Help Decrease Your Homeowners Insurance Payments
There's no benefit to overspending on homeowners insurance costs as long as you have ample coverage from a reputable provider. In 2021, homeowners paid an average of $1,249 per year in homeowners insurance, according to the 2021 National Association of Insurance Commissioners report. It's a wise investment, as home insurance may cover many unexpected and accident-related costs that are hard to budget for, such as fires, thefts, and vandalism. It may also provide liability insurance, helping to reduce the risk you'll have to pay if someone is hurt on your property.
The good news is there may be ways to reduce what you're paying to insure your home. If you have not done so recently, consider taking a closer look at what you are paying for home insurance and assess if it's adequate (or even too much) coverage. Then, set out to find some discounts.
Here are four ways you could potentially reduce what you're paying for homeowners insurance each month.
Increase your deductible
The deductible on a home insurance policy is the dollar amount the policyholder must pay before the insurance company covers the rest of a covered loss. Many plans have a fixed deductible, which is a specific dollar amount. Some have a percentage deductible, meaning the policyholder is responsible for a percentage of the loss.
The average home insurance deductible generally falls between $500 up to $2,000 per policy, according to The Ascent. If you increase your deductible, your insurance premiums (the cost of coverage) could drop. Don't raise this amount more than you can comfortably afford to pay out-of-pocket should an incident occur.
What's the right amount for you? Consider this — If lightning struck your home, causing significant damage, how much money do you have readily available to pay for the repairs? You may wish to consider putting aside an emergency fund for the amount of your deductible to help minimize the risk of not having cash on hand to handle a situation like this.
Shop around for reputable, but affordable insurers
Insurance companies set their own rates for policies. Often, there is a significant difference from one insurer to the next. Shopping around and asking for a few free quotes could help you to save money. However, choosing a reputable insurer is still very important. The Insurance Information Institution states that consumers should check the financial stability of any insurer they hope to work with using companies like AM Best. It's also helpful to check out any complaints about the company through the National Association of Insurance Commission.
Finding the balance between an affordable policy and a reliable, financially stable company is important. If you need to file a claim at some point in the future, you want to be sure the insurer isn't going to make it difficult.
Most often, it's easy to obtain a few free quotes using the online tools insurers offer. Now that you know an insurer is a safe bet request a few quotes. You shouldn't have to pay for a quote or have any obligation to the company should you choose to go another route.
Add some home security
Some companies offer an insurance discount if you have a home security system. This may help to reduce what you're paying for home insurance by as much as 20%, according to SafeWise. Several factors play a role in how much insurers will reduce your costs, though.
Monitored home security tends to offer the best benefit. With professional monitoring, should someone break into your home, a technician at the monitoring location can quickly verify what's occurring and call the police on your behalf. Likewise, if a smoke alarm sounds, the technician can quickly get emergency help to your property, even if you're not home.
Other types of security may still help save you money. Adding a few cameras to your home could deter theft and break-ins. Adding security lights may help, too. To learn how much you could save with your existing insurer, give them a call or use their online chat feature to ask. It only takes a moment, but it could help you save significantly.
Find all the discounts
Many insurers offer a sizable number of discounts, but they don't always tell you about them upfront. You may already qualify for some of these.
Some companies, like TMA Insurance Trust, offer a discount between 10 and 25% to those over the age of 55. They also offer a claims-free discount of up to 20%. Progressive offers up to 5% when you bundle your home and auto insurance together. Other discounts they offer include a pay-in-full discount if you pay your policy premium upfront, a new home discount, and a safety and alarm discount.
Ask your insurance agent or broker about military discounts, claims-free discounts, and roof upgrade savings. If you can make your home safer from risk, more fire resistant, or better protected, you may be able to save money. There's no harm in asking for a discount. Many insurance agents want to secure your business. They're happy to tell you all about the ways their company saves clients' money.