With homeowner's insurance rates on the rise, you may be looking for ways to reduce your annual premium without skimping on coverage. After all, a large portion of your net worth resides in the same place as you do.
But there are a number of strategies you can use to chip away at your overall annual premium, including:
1. Raising your deductible - Your deductible is the amount of risk you agree to accept before the insurance company starts paying on a claim. As homeowner's rates increase, you may want to be willing to take on more of the risk yourself. So if you have a low deductible of $500, you may consider raising it to $1,500. You could save up to 25% on your premiums.
When assessing your deductible, you should ask yourself: "How much risk am I willing to assume?"
2. Combining homeowner's and auto policies - Consider buying your homeowner's and auto insurance policies from a company that offers both. Some companies offer discounts of 5% to 15% if you buy both types of coverage from them. Ask us to look into buying your policies from the same insurer.
3. Asking about other discounts - Insurers will often offer discounts for people who install smoke detectors, deadbolt locks, security or fire alarm systems, fire extinguishers in the home, as well as for roof type and more. Also, if you're over 55 and retired, you may qualify for an additional 10% discount.
4. Don't buy coverage you don't need - Don't buy insurance for risks you are unlikely to encounter; for example, earthquake coverage in a non-earthquake zone, or a jewelry floater to your policy if you don't own expensive jewelry.
5. Making your home a better insurance risk - Ask us what you can do to make your home safer for insurance purposes. For example, you may consider making changes that reduce the risk of damage from windstorms and other natural disasters. Or you could update your wiring or heating systems.
6. Knowing what your homeowner's policy covers - Your home is your biggest investment. Make sure it's adequately protected from risks you cannot afford to cover yourself, and that it covers any home improvements you've made, major purchases, and increased costs of rebuilding.
7. Keeping your policy up to date - Every year, before your homeowner's insurance policy is due to renew, read the details of your policy and call us to discuss any changes in your situation that occurred during the previous 12 months.
8. Avoiding risks that insurers shun - Insurers are shying away from additional risk, such as homeowners with certain dog breeds like pit bulls, Doberman pinschers and Rottweilers. These breeds can limit or void your policy altogether. Other risks insurers aren't keen on include trampolines and swimming pools, both of which can increase your premiums.
Read all the fine print in your policy under the "Conditions and Coverages" section.
9. Improving your credit score - Insurance companies are increasingly using credit information to price policies. Don't have too many open credit accounts, don't charge close to the limits on your credit cards, and pay all your bills on time to keep your credit score healthy.
10. Renovation discounts - Ask about discounts for new or recently renovated properties. Because a newer home usually results in fewer losses, some insurers reduce rates by up to 25% for properties that are less than five or 10 years old. Likewise, homes that have had significant renovations completed by a qualified contractor can also qualify for reduced insurance premiums.
If you have any questions about your policy and how to reduce your annual premium, call us. We are always glad to help.