Save on Home Insurance

11 Ways to Save Money On Your Home Insurance

Now that you know the basics of your home insurance policy, here are 11 ways you can pay less. In many cases, you can get the same level of coverage for fewer dollars.

  1. One Insurer, Multiple Policies -- Do you have an automobile insurance policy? If so, is it with the same insurance company that provides your homeowners insurance? If the answer’s no, you’re paying too much -- for both policies. Almost every insurance company that sells home insurance wants its policyholders to also buy auto insurance from them. So, they offer “multi-policy discounts” to entice you. Usually, these discounts are at least 10% -- and some insurers apply the discounts to both the auto and the homeowners/renters policy.
  2. Raise Your Deductible -- The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $500 deductible and you file a claim for $2,500 in damage to your home, you pay the first $500 and your insurer pays the balance, $2,000. The higher your deductible is the less you pay for your policy. Of course, you risk more out-of-pocket if you have a claim, but you save on your premium each and every year.
  3. New Is Better -- Insurers really like newer homes. That’s because it’s less likely something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer a variety of discounts based on the age of your home.
  4. Location, Location, Location -- Where do you live? If your home is near a fire station, you will pay less for your home insurance. If your neighborhood has fire hydrants you will pay less for your home insurance.  Where you live will impact the cost of your home policy.
  5. Insure the House, Not the Land -- Nobody is going to steal your land. Fire and high winds won’t “destroy” it. And your home policy doesn’t cover your land anyway. So, don’t include the value of your land when deciding how much insurance you need. Have your broker run a replacement cost estimate to determine what it will cost to rebuild your home – and other structures – if they’re destroyed. The market value of your home doesn’t matter. It's the cost to rebuild your house that matters.   But remember,  in certain markets it can actually cost more to rebuild you home that what you would get if you sold it, land and all.  It is also important to note that insurance companies don't have the cost efficiency of building multiple houses at the same time.  They also don't get to start with a clean piece of land.  They have to include the cost of cleaning up the damage and removing the debris.  There is also the added cost of needing to build quickly so you can get back in your home as soon as possible.  If a contractor has to pull employees from existing jobs or pay overtime to get the job done those added costs increase the amount an insurance company has to pay.