1. Raise your deductible
Raising your deductible is one of the easiest ways to lower your premium. In fact, even if you can afford to raise it a small amount, you can save yourself quite a bit of money. Most insurance companies recommend a deductible of at least $500. But if you can afford to go up to $1000, you could save as much as 25 percent. This is a great way to save a nice chunk of change, but before you do, just make sure that you could afford to pay the higher deductible out of pocket should something happen.
2. Differentiate between your home’s value and rebuild costs
Many people think that if they paid $200,000 for their home then their coverage should be for $200,000, but that is not usually the case. Your home’s appraised value includes the land costs. Should your home ever need to be rebuilt, the land, of course, would not. Instead, ensure that you are covering what it would cost to rebuild your home – not its appraised value. Omitting the value of the land your home is on can reduce your premium by a huge amount – particularly if you live in an area where land is at a premium, such as Hawaii or California.
3. Buy your home and auto insurance from the same company
Companies want your business, and they want all of it! So, naturally, the majority of them will offer a bundle or multiline discount to try to encourage you to use them for all of your insurance needs. This is definitely one of the best ways to save, as it is one of the more significant discounts that you can get when it comes to insurance. In fact, this discount is typically around 15 percent — and that is on both your home insurance and your auto insurance. When I was shopping around, I tried getting quotes with companies for multiline as well as quotes for home only, and I was pretty surprised to see how much higher the same coverage was if I didn’t bundle.
4. Ask about discounts
What KCL doesn’t love discounts? There are actually quite a few discounts to be had in the world of insurance. Depending on the company you are using, you could get a discount for living in a gated community, being a non-smoker or being claim-free. Most insurance agencies also offer group discounts, which means that they offer discounts to those who work for select companies or to alumni from certain schools. These cuts can add up nicely, too! If you think that you might be missing out on any of these, simply call up your insurance company and let them know that you would like to ensure that you are not missing out on any available discounts. You never know what they might find for you!
5. Improve security and safety features
Insurance companies want your home to be as safe and secure as possible to minimize risks, so the more secure your home is, the lower your premium will be. In fact, a security system can reduce your premium by as much as 20 percent. I installed a security system about a year ago and was thrilled when I found out that this would knock about $160 (or about $13 a month) off of my bill. Currently, I pay $34 each month for the security-monitoring system, so with the discount from my insurance I feel as though I’m paying about $20. If a security system is something that you’ve been considering, this extra discount might just make it worth it. However, even if you’re not in the market for a monitoring system, small improvements such as dead bolts and smoke detectors can bring discounts of 5 percent or more.
6. Consider paying in full
Some insurance companies actually offer a discount if you pay your homeowners insurance in full as opposed to paying it in monthly increments. I actually used to pay my insurance monthly until I discovered that the company I use offers a 5 percent discount if you pay for the whole year up front. This cut almost $90 off of my insurance bill! If it’s within your budget to pay your homeowners insurance in full, it’s definitely worth thinking about.
7. Shop around
Before you start calling every insurance agency around to get a quote, do a bit of research on each company. Talk to friends and neighbors and read online forums and reviews to try to get an idea of the type of service each agency provides. A good resource is the National Association of Insurance Commissioners. On their site you can view information about companies such as complaint history, as well as general information about insurance in your state. Once you’ve eliminated the companies that you feel you wouldn’t want to do business with, begin calling for price quotes.
8. Review your insurance every year
Every year when my insurance renewal papers come in the mail, I typically just flip to the last page to see if my premium has gone up. It’s very tempting to just look at the bottom line and not reevaluate the details — especially when you’re renewing with the same company — but by not looking more closely, you could be losing money. When I first signed on with my current insurance company, I purchased an insurance rider for a few pieces of jewelry that I owned. I later sold the jewelry but completely forgot about the added insurance! It turns out that I was paying about $60 more each year than I needed to. It is very important to review your policy each year to ensure that it accurately covers your home and belongings.
9. Consider home improvements
If you’re thinking about doing any home improvements, call your insurance company to find out what types of improvements will lower your insurance costs. For example, if you live in an older home, consider updating the plumbing or electrical systems. Other improvements that may lower your premium are reinforcing the roof, adding storm shutters, or modernizing heating systems. Any improvements that lessen the chance for disasters will quite likely save you a bundle of cash – not to mention give you peace of mind and possibly improve the value of your home.