Unless your home is paid for in full, homeowner's insurance is a requirement from your mortgage company. Even if your mortgage is paid off, it's still a good idea to protect your investment and keep from having to pay out large sums for repairs after catastrophic events or to replace valuables. If you want to keep costs down, there are ways to lower those payments. Here are seven tricks to reducing your homeowner's insurance premium.
Increase the Deductible
This is one of the first things homeowners do to bring down that monthly payment. If you feel confident you won't have to file a claim or you're simply more comfortable with paying a little more out of pocket should something happen, increasing your deductible may be a good plan for you.
Most people have at least a $500 deductible, but raising that could save you 25% on your premiums. Over the course of several years, that savings can add up, making the higher deductible worth it.
If you have auto insurance, you may want to call the insurance company and ask if they offer bundle deals. Many insurance companies offer a discount on your premium if you bundle your auto and home insurance together.
Beef Up Your Home Security
Anything you can do to prevent damage or theft from occurring will make your insurance company smile. As a result, most of them offer incentives in the way of savings.
Installing dead bolts, burglar alarms, and smoke detectors are all ways to cut down your monthly premiums. But what if you want to take it to the next level? You can save even more if your burglar alarm is monitored by a professional service and calls the police department when it goes off. Also, putting in a sprinkler system can reduce your payment by as much as 20% if the whole house is covered.
Before making an investment, be sure your insurance company offers a discount for the particular brand you're interested in, as some companies require up-front approval.
Maintain Good Credit
It seems like everyone monitors your credit nowadays, and that holds true for some insurance companies as well. They like to reward those who pay their bills on time by keeping premiums lower.
The good news is that you can reap those rewards if you have good credit. And if the insurance company gives you a higher quote than what you expected because of a lower credit score, be sure to verify the accuracy, especially if you believed your score to be higher.
Insurance companies love long-term relationships. Stick around for a few years, and you may get a discount.
Evaluate Your Policy Every Year
Your premiums are determined by a number of factors that aren't likely to change, such as square footage of the home, susceptibility to natural disasters, and even your age and gender.
But some things do change every year, and it's worth looking at your policy to see if reporting those changes can save you money.
For example, you may have owned some estate jewelry that was covered in your policy, but six months ago, you gave every bit of it to your niece. Or you could have updated your plumbing or heating system. Reporting these changes might afford you a discount.
Know What Can Affect Your Premiums
If you're in the process of house hunting, you may want to be aware of things that can increase—or decrease—your premiums. Living near a fire hydrant or in a neighborhood with a professional (as opposed to volunteer) fire department nearby can bring your rates down. Choosing a brick home in a windy area, or a wooden home in a city where earthquakes are frequent, is another way to save.
If you have your heart set on a particular house, you can request a CLUE report from the current owner. That will list the home's claim history and give you an idea of potential problems.
Contact a company like State Fund Insurance for more information.