How to Pay Less for Quality Homeowner’s Insurance
By Teresa Ambord
Homeowner’s insurance can be a real blessing if you have a claim that exceeds your deductible. But it can also feel like a financial burden.
There are ways to save money on homeowner’s insurance without resorting to buying from a fly-by-night company that may never pay your claims.
Start by shopping around
But remember, you need quality service as well as a good price, or you’re wasting your money. Friends and family may be able to steer you in the right direction. If you are considering a company you are not familiar with, here are two ways you can check them out:
Contact the National Association of Insurance Commissioners at Consumer Action. They have helpful information, which includes complaints filed against companies.
It’s also important to check the financial stability of an insurer. Do this by logging onto:
Now that you’ve found a few reputable companies, you can get price quotes.
Multiple policies
Ask the insurer if you will qualify for a discount by transferring your auto policy to them as well as your house insurance. You could save from five to fifteen percent on your house policy this way. Just check for yourself before you do, to make sure your new combined policy really is cheaper than the two policies from separate insurers. If you’re a long-term customer of another company, you may be getting the best possible deal already.
Loyalty
Which brings us to the next point. Many companies will give long-term customers discounts of five to ten percent, depending on the number of years you’ve been with them. If a company has been good to you sticking with them may benefit you in terms of peace of mind, and your pocket book.
Consider a higher deductible
If your deductible is, say $500, you may save as much as 25 percent by raising it to $1,000. Of course, you need to know you can pay the deductible if a claim arises, either by having the money available or room on a low-interest credit card. Before you make this change, ask your agent if you have more than one deductible. Homes in high-risk areas, such as an earthquake zone, may have separate deductibles.
Discounts
You may be able to lower your premiums by taking certain steps to minimize some types of risk. An example would be using a type of roofing that is less likely to suffer damage in severe weather.
Also many insurers offer discounts if you install smoke detectors, burglar alarms, deadbolts on exterior doors, and keep at least one fire extinguisher handy…all safety measures that make sense anyway. Even greater discounts may be available if you install sprinkler systems and alarm systems that directly contact the police or fire departments. Before you do this, ask your agent if the system you are interested in meets their standards.
It can’t hurt to ask if there are other discounts you may not have thought of, such as for veterans, retirees, or people with disabilities.
Keep an eye on your credit
Poor credit haunts you in so many ways, and insurance is yet another area. Insurers may look at poor credit as an indication of a generally unreliable lifestyle, even if that isn’t the case. (If poor credit causes your rates to be high, the insurer is obligated to inform you of that fact.) This is just one more reason to pay your bills on time, avoid running up credit purchases, and review your credit report at least once a year.
Consider costs to insure when you buy a home
If you buy a home in a high-risk area, chances are, you’ll pay for it with high premiums. That may not be enough to stop you from buying that beachfront home you’ve always dreamed of, but it should at least be something you are aware of and willing to pay.
