In today's economy, you—like many others—are probably looking for more and more ways to save a buck. Some have started eating out fewer times a week while others have taken up clipping coupons. Obvious lifestyle changes aside, there are ways to save big bucks with little to no changes in your daily routine. By researching the smart way, you can reap long term savings through lowering your homeowners insurance. It may sound more complicated than clipping coupons, but there are actually some simple
ways to lower your homeowners insurance without much headache. Best of all, once you've put in the initial effort, the savings are immediate and automatic.
Get out your pencil and notepad. Here are the top 5 ways to lower your homeowners insurance.
1. You better shop around! This tip may sound obvious, but you'd be surprised how many consumers are unaware of the fact that they have choices. Most people don't think there's much of a difference between policies, so they jump at the first (or most convenient) company that pitches them. Don't be a lazy consumer. Research companies, get feedback from friends and family, review consumer guides, check the financial ratings of companies, and make lots of phone calls. Becoming well-versed in this industry makes it harder to be swindled when the time comes to put your financial and material future in someone else's hands. Be up front about what you're looking for and ask insurance agents what they can do to lower your costs. Try to narrow down your search to about 3 companies, then get price quotes from each. You'll be glad you did!
2. Raise your deductible. This may not seem as obvious as the first step, but it can be equally important, especially if you don't live in a high-risk area (one that is vulnerable to crime, coastal storms, fires, etc.). The deductible is the amount you pay in the case of such a loss before your insurance coverage kicks in. Many policies start as low as a few hundred dollars. By increasing this amount to several hundred, or even thousand, dollars, you can significantly lower your monthly payments by as much as almost 40 percent. Talk to your final 3 insurers to find out more about their specific policies and how much you can actually save by taking this route. Make sure the deductible you settle on is within reason. This way, you'll be sure to get the most out of your policy.
3. Improve your home's security and fortitude. There are tons of little home improvement projects that can knock anywhere from 5-20 percent off your premium. Some of the easiest ones include installing dead bolts, smoke detectors, and burglar alarms. Installing sophisticated monitoring alarm systems, adding storm doors and windows, or updating your heating/plumbing/electrical systems are some of the more expensive ways to cut costs, but the returns can be much more significant. Make sure you check with your insurer to find out which improvements will wield the greatest discounts before you start turning your home into Fort Knox.
4. Don't insure the land under your house. When deciding on how much homeowners insurance to buy, be sure to only include the value of your house and other "floaters" (expensive jewelry, electronics, art), not the value of the land under your house. Some consumers unwittingly confuse the value of their home with rebuilding costs, and therefore have a higher premium than they should.
5. Stick with the same company. One of the easiest discounts to get is by purchasing more than one policy with the same company. Many insurers offer homeowners, auto, and liability coverage. Many will offer a 5 to 15 percent discount when you buy multiple policies. However, make sure that it is in fact cheaper to stick with the same company, even with the discount. Sometimes you can find better deals elsewhere. Another way to lower insurance is to stay loyal to a company for several years. Some give as much as 10 percent off if you stick with them for more than 5 years.
Saving money on homeowners insurance can be as simple or as elaborate as you make it. By knowing the industry and asking the right questions, you'll find that many insurers will be willing to work with you and give you great deals. Shopping the smart way really does pay off in the long run!
By: Danielle Bonk
