When you own a home, there are several recurring expenses that need to be dealt with on a monthly basis. While most people are fully aware that they will have to make their mortgage payments, have recurring maintenance expenses, and pay property taxes, the cost of insuring the home is often overlooked. Having a good home insurance policy is extremely important, and it is often required by your lender. While it is going to be a recurring and unavoidable expense, there are 7 things that you can do to reduce your home insurance costs.
The first way that you can reduce your insurance expenses is by shopping around. Most people have instant access online to dozens of insurance providers. By simply inputting your basic information and policy needs, you could receive many different competing offers. You could save money by either selecting one of the cheaper policies or by using them to negotiate a lower rate.
Many people are also able to save money on insurance by simply combining their policies. Most homeowners also have other insurance policies, including auto or life insurance. If you are able to get all of your insurance from the same company, you could qualify for a multi-policy discount, which could cut up to 20% off of your insurance bill.
A very effective way to immediately reduce your insurance coverage would be to increase your insurance deductible. The deductible is the amount of money that you will have to pay out of pocket before a claim is made. If you raise the deductible by even a little bit, you could see a significant decline in your home insurance premiums. However, be sure to select a deductible which will be easy for you to pay for in the event you need to file a claim.
The fourth way that you could reduce your home insurance costs is by knowing your home re-build cost. The main factor in determining your insurance costs is determining how much it would cost for your home to be re-built. More often than not, people overestimate the cost to re-build their home. Be sure to get a good estimate from an architect or contractor and adjust your insurance application accordingly.
Beyond knowing the cost to re-build your home, you will also need to consider the value of your personal items. In most situations, a home insurance provider will project a blanket estimate for personal items. This estimate, which does not include expensive items such as art or jewelry, is normally much higher than the actual value of someone’s items. If you believe that the items were over-estimated, then you should request to have the estimate reduced. The reduced coverage will result in lower premiums.
Prior to starting the process of shopping for insurance, you should be sure to get a full understanding of what elements in your home may already be covered by insurance. If you live in a large community with a full association, there is a good chance that many of the exterior elements of your home, such as your roof and windows, may already be covered by the association’s policy. If they are, be sure to reduce your insurance coverage appropriately.
The seventh way that you could reduce your home insurance expenses is by improving the security in your home. Insurance providers always take into consideration the security systems in your home. If your home is well secured, the chance of your home being robbed or vandalized decreases dramatically. Since there is a much lower chance of you needing to file a claim for vandalism or theft, the insurance company will be willing to offer you lower premium charge for coverage.
