One of those essential expenses that we all have is the cost of home insurance, especially those of us who are homeowners. Most of the time we just pay the premiums and never make a claim as nothing untoward happens that would require a claim. This is a great reason for investigating if you can reduce your cost of home insurance.
There are different ways to do this, but start by checking what your renewal costs are and then get some fresh quotes to compare against your existing insurer. Make sure you ask for the exact same cover, with the same amount of excess to get a true comparison.
If any of them come in cheaper, then go back to your current insurer and ask them if they are willing to match the price. If they are, it saves you the difference in price and the effort of moving to another insurer.
If the different quotes are comparable, but still more than you want to pay, then consider doing any or all of the following:
- Offer to pay a higher voluntary excess. This often reduces premiums.
- Reduce the contents level to the minimum. Many home insurance quotes put in a standard level of contents cover which is fairly high in value. You don’t want to pay for more contents insurance than you need.
- Don’t get separate contents and buildings insurance quotes. A combined policy will work out cheaper.
- Opt out of any extra cover such as home emergency cover, personal possessions cover and accidental damage cover. While each of these can be useful, they will increase the annual cost of your premiums.
Taking these kind of steps can help to reduce the cost of home insurance and is worth doing as long as you make sure you still have an adequate level of cover should you ever need to make a claim.
If you have seen an increase in your premium this year, here are three things you could attempt to do so your rates don’t blow the roof off of your budget:
Raise Your Deductible – I’ve always been a bigger fan if you have a healthy cash reserve to keep deductibles on things like your homeowner’s insurance higher (in the $1,000 level or higher if the insurance company allows for it). You can never know when a major item will hit your home like lightning striking your air conditioner, but changing the deductible to a higher number could save you as much as 25%.
Make Sure You Have A Good Credit Record – Many insurers are increasingly using credit scores as they price out homeowner’s insurance policies. Fixing your score won’t only help you when you go for a loan, but it could help keep your rates down come insurance time.
Review Your Coverage – Is your home worth what it was before the downturn in this real estate. I’ve seen many homeowners’ go to their local county to appeal their real estate tax bill, but very few go back to their homeowner’s insurance company to change the amounts on their insurance. Will it cost the same to rebuild your house today as it did in 2007? Are the contents of your house worth the same? Did you install a new alarm system? All of these types of questions could be important in helping you save money.
We maintain a higher deductible and also have minimized our contents insurance. That has saved us quite a bit.
Obviously you should raise your deductible but I also thought of a good one on my own. When I was going over my policy with my agent, she told me that a few years ago when there were big fires in San Diego, the insurance companies automatically paid out whatever limits people had on dwelling and personal property. I believe personal property is much cheaper to insure so if you wanted 50k dwelling and 25k personal property you could effectively switch it to 25k dwelling and 50k personal property and lower your premium. Something to think about 🙂
Agreed on raising the deductible. I wonder about bundling coverage – wouldn’t that help cut down costs?
There are lots of discounts out there if you look and ask for them. Also doing minor improvements on your home could also reduce rates. Things like adding deadbolts can decrease your premiums immediately and might be something to look into. Thanks for sharing!