There’s no doubt about it: with soaring home prices across the country, it’s more expensive than ever to be a homeowner. Between mortgage payments, property taxes and utilities, it’s not unusual for budgets to be stretched – and ideally you want to be saving money, too.
Unfortunately, as we learned in KL’s blog post series, home insurance is a must-have for homeowners – and as home values go up, so do the premiums. In fact, homeowners are regularly faced with double-digit increases. While the premium for your home insurance might shock you at first, there is a list of ways you can lower it.
1. Shop the Market
Sure, it’s easy to simply glance at your annual renewal letter, sign the dotted line and file it away. It’s in your best interest, however, to dive into the numbers. What you want to find is the amount of your insurance premium that is due at renewal time and compare it to what it was the year before. If it’s increased substantially, you should consider shopping around. With the help of an insurance broker or a comparison website, you can instantly receive home insurance quotes and see if you can find a better deal elsewhere.
2. Raise Your Deductible
Your deductible is the out-of-pocket expense you pay when making a claim. Standard home insurance policies typically have a deductible starting as low as $500 or $1,000. You’re not likely to make a claim for $500, so why not consider raising your deductible? By raising your deductible, your premiums will go down. If you raised your deductible to as much as $2,500, you could substantially lower your premiums.
3. Bundle and Save
Similar to when you bundle your cable, Internet and phone services with a telecommunications company, you may be able to bundle your insurance products. Bundling not only gives you the opportunity to have all of your products with one company, it may also give you access to a sizeable discount. If you start shopping around for a new home insurance provider, be sure to ask about their other insurance products and what type of discount you could get by switching all of yours over.
4. Pay Annually Instead of Monthly
Even though it might be easier on your budget to make monthly payments, you pay a little extra to do so (there’s usually a 3.00% financing fee). Home insurance providers frequently charge extra administrative fees when you make monthly payments versus one lump sum payment for the year. If you put a little money aside each month, you should be able to save up what you need before it’s time to renew again.
5. Install a Home Security System
Installing a home security system does two things: 1) it helps to deter burglars, and keeps you and your family safe, and 2) it could get you a discount on your home insurance. Some companies offer more of a discount than others, but you should expect to save up to $200/year on your home insurance, simply by installing a home security system.
6. Quit Smoking (or Never Start)
It’s 2014 – we all know that smoking is hazardous to our health. But did you know that you might pay higher home insurance premiums because of your bad habit? Not only does smoking hurt your home’s value (a recent study suggests it can decrease your home’s value by 30%), it only takes one lit cigarette to burn it down. Ask your home insurance provider if they offer a discount to non-smokers.
What are some other ways you can save on home insurance?