Bundling, or insuring your home and auto with the same carrier, is a fairly well-recognized way to save money on your homeowner’s insurance premium. Smoke detectors, alarm systems and gated community patrol services also help. But there’s a lot more you can do to lower the cost of your policy.
Here are seven things that could help you qualify for a discount on your homeowner’s, without being penny-wise and pound-foolish:
1. Go with a higher deductible. The more that you pay out of pocket, the more in premium dollars you will save. Just be careful not to set your deductible too high. It all depends on your household income, of course. A $5,000 deductible might be doable. But $10,000 could put too much of a strain on your pocketbook. Either way, you’re unlikely to file a claim in most years and you could save hundreds of dollars in premiums by raising your deductibles.
2. Avoid frequent claims. What’s the point of insurance, you might ask. Good question. Insurance protects us from unexpected, catastrophic losses. Fires, hurricanes, massive hailstorms and so on. If your deductible is $5,000 and you’re facing a $7,500 repair bill, you might just pay the difference out of your own pocket and save more on premiums down the line.
3. Make home improvements. Sure, the replacement value of your home is likely to rise after you upgrade the kitchen and so your premium will no doubt rise. But you could see a discount when you modernize the heating, plumbing and electrical. Better yet, you’ll no doubt see a drop in your utility bill.
4. It’s not about the land. Disaster strikes, of course, but it’s no threat to the dirt under the house. Be sure you’re not including the value of your land in how much insurance you buy. You’re just throwing money away.
5. Be sure your credit is good. Insurance companies rely on your credit information in setting their rates. High debt levels and bills that get paid late can do plenty of damage. If you’re in the market for a new home, try getting a quote from your agent for homeowner’s insurance first.
6. Review, review, review. How much do you really need? Are you over-insured? Did you sell that old ring? Is that fur coat worth as much today as when bought it 10 years ago? On the other hand, that $500,000 house you bought five years ago is no doubt worth more – possibly much more – today. Reviewing the limits of your policy and value of your possessions is something to do at least once a year.
Lynn Paricio is an Account Executive at CCIG. Reach her at LynnP@thinkccig.com or 720-212-2060.