Many believe that expensive homeowners’ insurance is just the reality of living the American Dream. But, there are ways to lower your premium. This year, instead of (only) cringing and cursing about the cost of renewing your homeowners’ insurance, find out if any of these tips can reduce your policy premium.
Increase Your Deductible: The deductible is the amount you have to pay before the insurance company starts paying a claim. As a general rule, policies with higher deductibles have noticeably lower premiums. Also, find out if a hurricane-only deductible can be expanded to an all-wind deductible, which can produce policy credits and lower premium.
Bundle Policies: Some insurers offer substantial multi-policy discounts. Consider buying your homeowners’, automobile and umbrella policies from the same insurance company.
Eliminate Unnecessary Coverages: Homeowners’ policies often include coverages or limits that may be unnecessary or excessive. For example, Coverage B (Other Structures) under a standard homeowners’ policy generally covers structures that are not attached to the home, like sheds, detached garages, gazebos and pools. Homeowners with inexpensive or nonexistent ‘other structures’ may be able to lower their premium by removing or reducing this coverage.
Discuss Ordinance and Law coverage and other ‘Bells & Whistles’ endorsements. Weigh the benefits against costs. Consider how you want personal property (content) claims to be settled. Do you need replacement cost or can you settle for depreciated actual value?
Think Twice Before Filing a Claim. Gone are the days when homeowners’ insurance was used for every conceivable claim. Since filing a claim can lead to higher premiums, it may be cheaper to pay minor claims and claims that are clearly not covered out of your own pocket. If you’re not sure whether to file a claim, ask your agent.
Assess Your Personal Property. Make sure your personal property values are in line with the automatic coverage provided in most policies. Oftentimes, an accurate valuation reveals that coverage limits are significantly higher than necessary.
Your Home More Disaster Resistant: Insurance companies typically provide premium credits and discounts for improvements that increase the structural security of your home, like adding storm shutters or reinforcing the roof.
Improve Home Security: Discounts are often available for various safety and security features, many of which are relatively inexpensive, such as smoke and carbon monoxide (CO) detectors, burglar alarms and deadbolt locks. Bigger discounts may also be available for more advanced security devices, like sprinkler systems and monitored fire and burglar alarms.
Eliminate Recreational Safety Hazards: Did you know that in 2014 there were nearly 105,000 hospital emergency room-treated injuries associated with trampolines? Your insurance company did. Getting rid of recreational items like trampolines, tree houses and jungle gyms may lower your premium.
Maintain a Good Credit Rating: Insurers are increasingly using credit information to price homeowners’ insurance policies and charging higher premiums to those with lower credit scores. It’s a good idea to review your credit reports regularly and promptly correct any errors.
Work with an Independent Insurance Agent: Shopping around may be a good way to save money, but it can be time consuming and frustrating. Since independent insurance agents have access to multiple insurance companies, they can do the shopping around for you. Reputable independent agents are also more likely to know about special rates and discounts that may be available.
There are a number of other ways to reduce your premium, but options may be limited by market conditions or individual circumstances. Nevertheless, you should at least consider all the alternatives before renewing your homeowners’ insurance policy.
If you have any questions or would like to learn more about premium discounts that may be available, please contact us.
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Setnor Byer Insurance & Risk 