Mortgage-related homeowners insurance is usually a must-have, and it adds to your monthly mortgage payments. But it’s a smart move because it offers financial help if you need to replace your stuff or rebuild after something bad happens. Plus, there are lots of ways to cut down on insurance costs. This is especially useful now since home prices have jumped 30% due to inflation and other factors. Remember, you can choose your insurer, so take your time to pick the right one.
Here are eight simple tips to help you lower your homeowners insurance costs:
1. GET MULTIPLE QUOTES: Start by comparing quotes from different insurers. Many free online tools make this easy. Learn about the different insurance policies and coverage levels. Typically, you need dwelling coverage for your home’s structure and personal property coverage for your belongings. If you have separate buildings like a garage or shed, get ‘other structures’ coverage. Make sure your coverage matches your home’s value. A higher deductible can mean lower premium costs. Review all quotes and packages carefully before deciding.
2. BUNDLE YOUR POLICIES: Combining your auto and home insurance with the same company can often save you money. Check this by comparing quotes, and ask your current insurer about discounts for bundled deals. Many companies, like Geico and Progressive, offer significant discounts on bundled policies. You might save between 10% and 20%, though it varies by insurer.
3. UPGRADE YOUR HOME’S SECURITY: Insurers look at your home’s risk factors, like how likely it is to face storms, fires, or burglaries. Improving your home’s security can lower your insurance rates. Up-to-date security systems and features like impact-resistant roofing and window locks can help reduce risks. Fewer claims mean lower insurance costs. Talk to your insurance provider before making any expensive upgrades to see if it will affect your rates.
4. LOOK FOR DISCOUNTS: Every insurance company offers various discounts, some of which you might not know about. Ask and explore your options. Discounts can come from home safety features or special rewards for certain groups like farmers. Companies like Liberty Mutual even offer special deals to long-term clients and new customers who switch policies before their current one expires.
5. RAISE YOUR DEDUCTIBLES: A deductible is the amount you pay out of pocket when you make a claim, usually between $500 and $1,000. Increasing your deductible can lower your insurance rates but might deter you from filing smaller claims. Think this through carefully as it means more financial responsibility on your part.
6. IMPROVE YOUR CREDIT SCORE: Insurance companies use credit-based scores to predict potential claims. Keeping a good credit score is important. Paying your bills on time and keeping credit usage low can help improve your score and lower your insurance premiums.
7. REGULARLY REVIEW YOUR COVERAGE: Periodic assessments of your property and possessions can lead to savings. For instance, if you’ve sold valuable items like antiques, you might lower your high-limit insurance. Always compare rates from different providers before making a change.
FINAL THOUGHTS: Managing your homeowners insurance wisely can cut down your mortgage payments and give you the best coverage at a reasonable price. Do thorough research, ask for discounts, and be open to changing insurers to keep your premiums low. Remember, your mortgage lender can’t tell you which insurer to choose as long as you have the required coverage.