Financial Planning Information Series
Insurance Planning

How Homeowners Insurance Can Cost Less

Homeownership comes with many responsibilities and expenses. Repairs for everyday wear and tear, taxes, and general upkeep can amount to significant sums. On top of that, homeowners insurance policies, while being a necessity, can add to amounts owed. Policy prices can vary according to the features and location of your home, as well as by the insuring company. In tight economic times, everyone hopes to keep costs down. Taking a few simple steps can help you save money on your homeowners policy and can even enhance your home’s safety features.

  1. Increase Your Deductible. Your deductible is the amount you will pay before the policy takes effect. Usually, a $500 deductible is recommended as a base minimum, but raising that amount to $1,000 can help you save up to 25%. It should be noted that certain geographic locations may have separate deductibles for natural disasters such as earthquakes, floods, hurricanes, etc.
  2. Do It All At Once. Buying an auto and homeowners policy from the same company can qualify you for a 5%-15% discount.
  3. Disaster-Proof Your Home. Take the necessary precautions to protect your home against the severe weather patterns of your area. If your town is susceptible to windstorms or hurricanes, for example, you may be able to save premium dollars by installing shatterproof glass in your windows.
  4. Buildings Only. Any land or property that belongs with your home should not be included when assessing your home’s value and the amount of insurance needed. Combining the two may result in higher premiums than necessary.
  5. Add Safety Features. Installing a smoke detector, burglar alarm, or dead-bolt locks can save the lives of you and your loved ones, and can save you as much as 5% on your bill. Sprinkler systems and high-end security systems can save you as much as 15%-20%.
  6. Loyalty Pays. Some companies offer discounts based on the number of years that you have held and renewed your policy. For example, holding on to the same policy for three to five years can be rewarded with a 5% discount. If the policy has been held for six years or more the discount can increase to 10%. In addition, retirees may qualify for discounts of 10%.
  7. Appraise Your Possessions. Make sure your coverage amounts are a true reflection of the worth of your valuables by having your possessions regularly appraised.
  8. Don’t Get Too Comfortable. When performing your own annual financial review, remember to examine whether your current coverage is still the best option and value.
  9. Buy Wisely. If you are in the market for a new home, consider the house’s features and how they may affect premium prices. Homes with plumbing, heating, and electrical systems that are less than ten years old can help you save money. A home that is in a community with a professional fire department, or that is close to a fire hydrant, could also cost less.

It is very important to have full and thorough coverage on your home, but it doesn’t have to cost you an arm and a leg. Do some research and consider adding additional safety features. You may be surprised at just how much you can save.