Homeowners insurance can be prohibitive but there are ways one can reduce the cost. Sometimes it requires spending money upfront, and some ways require you take a calculated risk. First, consider your deductible.
Deductible ~
This is the amount you agree to pay out of your own expenses would you have an insurance claim. The costs range from $50 to $5000 but $500 is common. If your deductible is $100, then you agree to pay that amount out of your pocket before the insurance claims covers other expenses. The lower the deductible the higher your premiums will be. If you choose a higher deductible, $500 or $1000, your premiums will be lowered. On average, a $500 deductible can save up you up to 12% on your premiums while a $5,000 deductible can save you over 35%.
This is a risk you must calculate yourself. Would you be strapped for $1000 should you have a flooded basement, for instance? If it is financially possible, choose a higher deductible. In the long run, the monthly or yearly savings in premiums could easily pay for the additional cost of the deductible.
Combine Policies ~
In order to secure more business, many companies offer combined policies for your home and vehicles. You can save on premiums by receiving a discount for allowing one company to insure all your insurable property.
Examine the Policy ~
It is up to the salesperson to sell you everything they can but some of the coverage is just not required by everyone. Consider whether or not you truly need earthquake coverage, for instance. Only purchase coverage for likely events.
Insure Your House ~ Not Your Land –
Your land will not likely suffer devaluation or restoration costs in the event of a disaster.
Know Your Policy ~
Insurance policies aren’t exactly a fascinating read however you might uncover conditions under which you can lower you premiums. For instance, if you are thinking of buying a trampoline for your yard, check to see if this will increase your premiums.
Protect Your House ~
If you invest in making your house as safe as possible, it not only brings a sense of personal security but can also translate into savings. Ask your insurance adviser for tips on lowering your premiums through such purchases as burglar alarms, storm shutters, and smoke detectors. Some companies will give attractive discounts if you install a home-security system. Ask about discounts if you apply fire-retardants roofing. These costs should be considered investments in your home, not just a means by which to lower premiums.
Think Before You Claim ~
It sometimes occurs to homeowners to make an insurance claim on every nuisance that befalls them but If you make a claim to an insurance company this usually results in higher premiums when the agreement comes up for renewal. In worst case scenarios, a company can drop you altogether and some people even end up on blacklists that make it increasingly difficult to get coverage at all, let alone at a fair and decent rate.
If you have a problem that could fall under an insurance claim, consider it carefully before calling your agent. If the expense is small enough, then cover it yourself and do not get your insurance company involved. In the long run, the adjusted premiums will be higher so that the company can earn their money back. If it is a huge claim – like a flooded basement that needs restoration, then by all means, make your claim. Still, expect higher premiums.
It goes without saying that you must shop around for insurance. Companies are getting more competitive but do not be fooled into believing a company’s own claims. And be sure to ask for ways you can reduce the premiums. You may not told if you don’t ask.