12 Ways to Insure Your Home for Less
The wealth of many families is tied to the value of their home, and it makes sense to protect that investment with an insurance policy -- something that's probably required anyway if you have a mortgage. Homeowners insurance covers you against theft, fire, natural disasters, and liability (in case someone sues you as a result of an injury or accident sustained on your property). Premiums can be costly, and rates may vary for nearly identical coverage from different providers. Cheapism.com identified 12 simple things you can do to get a discount on the rate.
Insurance premiums can rise depending on the age of your home, but you can help ward off an increase by investing in renovations. A new roof, foundation, plumbing, or electrical wiring can each lower your insurance rate. Be mindful of the renovation materials; using fire-resistant siding or shingles makes a difference.
There is additional risk when you keep high-priced jewelry, artwork, and other valuables at home. Storing these items in a safe deposit box at a bank can help reduce premiums. If you want to leave them out in the open -- artwork, say -- and happen to own a business, display the pieces at the office and insure them there. Ask your financial advisor if this counts as a business expense.
Each insurance company has its own way of pricing insurance and its own set of costs. Once you determine the amount of coverage you need, shop around for the cheapest rate and be sure to check customer reviews before signing on. Also check the fine print for exclusions or special rules; some companies may not cover pet-related incidents, for example, or may require that you fence in your pool before writing up a policy.
Buying multiple insurance products from a single provider is an easy way to get a discount. If you already pay for life or auto insurance with a provider get a quote for homeowner's as well. Sticking with one provider can earn you some loyalty points, and companies may reduce premiums by 5 or 10 percent for long-term clients. This is not an excuse to be lazy -- periodically shop around for the best rates for the coverage you want.
If you take steps to keep your home and personal property safe, you'll be rewarded with lower premiums. A fence, security system, water shut-off valve, and a safe for expensive jewelry or other valuables can be worthwhile investments.
The extra office supplies and equipment in a home office lead to larger losses during a burglary or fire and more potential for accidents -- and thus, higher premiums. Given all the advantages of having a home office, it may not be worth the cost and hassle to rent office space elsewhere, so consider covering that room with a separate insurance policy and enjoy a tax benefit.
The insurance company knows that if you have a trampoline, treehouse, or swimming pool, accidents are more likely and rates go up accordingly. You may be willing to part with the trampoline, but if your family pet is burdened with a dubious reputation (think Rottweiler or pit bull), parting with the animal in the quest for lower premiums probably isn't an option. Consider the consequences before introducing insurance hazards to your home.
As with most insurance, if you decrease the amount of coverage in your homeowners's policy, premium costs drop as well. That seems pretty straightforward, but the one complication about homeowner's insurance is how property is valued. You've paid for the land, your home, and personal belongings -- each worth something. But in the event of a major disaster, such as a fire or flood, it's unlikely that the land will be destroyed. Keep this in mind when assessing how much coverage you want. Insurance agents have home-replacement cost calculators that can help guide your decision.
Just like lowering your overall coverage can decrease premium rates, raising the deductible -- the amount you must pay out of pocket before the insurance kicks in -- has the same effect. If you want insurance only to protect against extreme contingencies, raising the deductible may be acceptable. But if you want coverage for small claims or situations like off-premises theft, think long and hard before lowering the deductible and be prepared to pay up if you do.
If you expect to buy homeowners insurance in the near future, or are considering switching providers, take some time to understand how your credit score is calculated and how you can raise it. Higher scores can lead to lower premiums, and simple actions such as applying for a new credit card can temporarily decrease your score. To increase your credit score try to use only 10 to 20 percent of your total available revolving credit and avoid holding a balance, if you can.
You buy insurance to protect you financially when something happens, but filing a claim isn't always worth it. If someone steals your $700 television but you have a $500 deductible, the $200 insurance payout might be less than what you'll pay in increased premiums at renewal time. Providers often offer premium discounts for being claims-free for multiple years.