5 Ways to Save on Homeowner Insurance

Date: February 25, 2022       Category: Insurance/Homeowner        Author: Kip Kelly

Most premiums payments on homeowner's insurance policies cost thousands of dollars each year. Although taking home insurance on your house is necessary, it does not need to cost you a lot of money. There are several steps that you can take to make sure you save hundreds of dollars in premium payments each year. Here are five steps you can take to save on your homeowners insurance:

1. Increase Your Deductibles

A deductible is the amount of loss you are responsible for once an unlikely event occurs. If you suffer a loss due to the occurrence of a risk, the insurance company will cover the value of your loss less all deductibles. Increasing your deductibles by several hundreds of dollars can cut your premium payments by up to 15%.

2. Reassess Your Cover

Take some time to review your insurance policy and the type of risks it covers. Most homeowners insure their houses against risks which are less than likely to occur. If you live in an area which is not disaster prone for example, then it might be unnecessary to insure your house against natural disasters. You should however choose your risks wisely as you may end up incurring huge losses once a risk that you are not insured against occurs.

3. Ask Your Insurer About Discounts

Most home insurance providers offer policy discounts and benefits to their clients. Find out if you are eligible for discounts such as bundled policy discounts or policy discounts that can save you up to 15% in premium payments. You should also inform your insurer of changes in your neighborhood that may lead to reduction in your premium payments. Neighborhood developments such as an increase in the number of fire hydrants or the introduction of a police station near your house will reduce your net exposure to risk. Informing your insurer of such changes can lead to a significant reduction in your premium payments.

4. Secure Your Home

Changes to your house such as installing a security system, fitting better locks to your doors and installing shatter proof windows if you live in a disaster prone area can lead to savings of as much as 5% of your premium payments. These changes may seem expensive at first, but they lead to great financial benefits in the long run.

5. Financial Discipline

There are two financial aspects that affect the amount of premiums you pay: Time of premium payment Credit rating. Making you premium payments on time not only reduces the amount of fines you will pay, it also helps you maintain a good reputation with your mortgage company. Defaulting in premium payments might cause your mortgage bank to take up a second insurance cover to secure their mortgage. The premiums that result from this second cover are normally paid by the home owner in the form of increased mortgage payments.

Paying your premiums on time therefore keeps the net payments you make at a minimum. Your credit score affects your premium payments and your eligibility for discounts. Keeping an improved credit score will help you to maintain low premium payments. The amount of premiums you pay for your homeowners insurance is determined by the size of your house, your level of security and your level of exposure to natural disasters. By reassessing your policy, you can lower your level of risk and significantly reduce your premium payment.