Tips for Saving Money on your Homeowner’s Insurance (Part I)

Homeowner’s insurance is an expense that is very seldom looked at by consumers. This is due to the fact that most homeowners pay their insurance through their mortgage company’s escrow account. However, even though you do not pay the bill directly, a reduction in your property insurance bill will eventually lower your mortgage payment.

 

There are a number of ways homeowners can reduce their insurance premiums. Here are four steps you can take right away without spending anything out of pocket:

Check for discounts you may already qualify for: You might already be qualified for a number of potential discounts without even realizing it. For example, if everyone in your home is a non-smoker, this may lower your rates. Other possible discounts include living in a newly built home, living in a gated community, being a member of a homeowner association, or being retired. Check with your insurance agent to find out the discounts for which you can take advantage.

Build and maintain good credit: A growing number of insurers are using the consumer credit score as one of the factors in determining the rates you will pay. Make sure you pay all your bills on time and do everything else possible to keep a high credit score. In addition, check your credit report at least once a year for errors. If there is any derogatory information on the report that should not be there, file a dispute with the credit-reporting agency right away.

Handle small repairs on your own: When it comes to homeowner insurance, it is a good idea to keep your claims to a minimum. The reason is that the more claims you have, the more likely your insurer will raise your rates. For this reason, if your home is damaged by a covered incident but the repair bill is only a few hundred dollars, it is best to handle it without filing a claim. In the end, this will keep your rates lower and the repair will likely pay for itself.

Shop around: Many companies do offer homeowner’s insurance in various regions of the country, but no single insurer provides the lowest rates in every place. For this reason, shop multiple carriers to find the one that provides the best coverage and lowest rates where you live. The easiest way to accomplish this is through an independent insurance broker that works with multiple carriers and can put together the best package for your particular situation.

 

In Part II of Tips for Saving Money on your Homeowner’s Insurance, we will explore other tips including alarm systems, upgrades to the homes wiring system, upgrading your roof, and how to ‘greenify’ your home.