How to Lower Your Homeowners Insurance Cost
Recent posts on Sweet Digs Seattle:
- Latest Eastside Price Reductions
- Rainy Days and Damp Crawlspaces Always Get Me Down
- Stewing over SLU
- Woah WaMu!!
When a bank loans you the dough to buy a house, they mandate that you have homeowners insurance, it’s part of the loan agreement. If you let your coverage lapse they’ll even instate a policy for you (usually at a price several times that which you would get on your own) and then send you the bill. So how can you maximize your coverage and minimize your cost? Here are 12 useful tips on how to pay less for your homeowners insurance:
1. Shop Around
It’ll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department. Get price quotes but also consider level of service.2. Raise Your Deductible
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. If you can afford to raise your deductible, you may save as much as 25 percent3. Don’t confuse what you paid for your house with rebuilding costs
Buy enough coverage to insure the replacement value of the structure of your home not including the land value. This is usually determined based on square footage and quality of finishes.4. Buy your home and auto policies from the same insurer
Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.5. Make your home more disaster resistant
In Seattle you can often get a better rate by doing earthquake retrofit. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.6. Improve your home security
You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations.7. Seek out other discounts
Companies offer several types of discounts, but they don’t all offer the same discount or the same amount of discount in all states. It never hurts to ask.8. Maintain a good credit record
Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies9. Stay with the same insurer
If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder.10. Review the limits in your policy and the value of your possessions at least once a year
You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need.11. Look for private insurance if you are in a government plan
If you live in a high-risk area — say, one that is especially vulnerable to coastal storms, fires, or crime — and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative or contact your state department of insurance for the names of companies that might be interested in your business. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.12. When you’re buying a home, consider the cost of homeowners insurance
You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. Since Seattle is an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5 to 15 percent.
