6 ways to lower your homeowners insurance premium
Homeowners insurance is necessary for every house. It provides financial protection if your property gets destroyed due to fire, theft, smoke, or even weather incidents like lightning or a storm. The insurance also covers damages to furniture or other interior objects. However, the premium of such policies can be expensive if not managed properly. Listed below are six ways you can cut costs on your homeowners insurance.
Maintain a security system
The first thing you can do to lower the annual premium of your homeowners insurance policy is to install a multiple-level security system. Having such security systems in place gives the insurance company a hint that your home is less likely to be affected by theft or burglary. So the premium is reduced. A burglar or smoke alarm directly monitored by the central or suburb station helps lower the premiums by up to ten percent. However, to avail this discount, you would need to furnish proof of a central monitoring system by providing the relevant bills.
Raise the deductibles
Homeowners insurance is similar to health, car, and goods insurance – the higher the deductible, the lower the annual premium. However, choosing a higher deductible comes with its drawbacks. The claims will not cover damages that cost a few hundred dollars, and you will have to spend from your own pocket. Such minor repairs include broken doors, leaking pipes, broken windows, etc.
Review and compare policies regularly
Always keep a check on other policies and never given up on comparison shopping. You can also maximize cost-cutting by looking into newly introduced policies, such as association member options, employer homeowners, etc. This practice should continue even after you purchase a policy. You should be updated about any changes made to the purchased policy that may lower the premium. Another hidden tip is that loyalty often lowers the insurance premium. The longer you stay with the insurance company, the higher are the chances of the deductible being lowered.
You can compare homeowners insurance policy companies by:
- Comparing insurers in different states or parts of the city
- Investigating the quality of the insurance company
- Studying how the insurance company reacts to claims
- Looking at the satisfaction of the policyholders
Also, remember to get multiple quotes from the company
Pay off the mortgage
This is a standard cost-cutting method. Paying off the mortgages on the house will reduce the annual premiums. In cases where the tenants hold the insurance, buying the home will lower the annual premiums. It works on the simple belief by the insurance company that you will take better care of a house that is 100 percent yours.
Look for multiple discounts
Insurance companies keep innovating and developing their policies. Therefore, you should keep a watch for changes that may benefit you. Some companies provide other insurance policies along with homeowners insurance at a discounted price. It can be a car or health insurance and is highly useful. Also, getting a quote for other insurances might save you from paying two different premiums.
Be careful when renovating the house
Any new structure constructed to the existing house needs to be insured separately. And the premium can go up or down depending on the materials used. Wood is more expensive to insure than metals because it is highly flammable; similarly, a swimming pool or other amenities attached to the house may drive up the insurance premium.
Homeowners insurance has become pretty unavoidable these days. Besides protecting your home and the valuables inside, home insurance is also mandatory to get a bank loan. In addition, most mortgage companies require the mortgaged property to be insured. At times, even tenants are obligated to maintain home insurance to safeguard their residence.
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