May 7th, 2015
While homeowners often think they're getting a good rate on their home insurance, they may be spending more than they expect. To save money on insurance, homeowners should consider the various factors that affect rates and choose their home's location carefully.
Here are five ways to avoid overpaying on homeowners insurance:
1. Bundle insurance policies with one company
When shopping for home insurance, owners should ensure their policies are cost effective by comparing individual versus bundled policies. Often, policyholders can save money by having their insurance policies under one company, such as bundling home and auto insurance together, Consumer Reports suggested.
2. Add home improvements designed to guard against disasters
While a home is already built strong, there are home improvement projects property owners can take on to reduce the vulnerability of their houses to disasters. These include installing shatterproof windows as well as putting in more durable roof materials, according to the Insurance Information Institute. Homeowners can select home remodeling tasks based on the types of disasters their neighborhoods are at risk for.
3. Purchase homes based on low-risk areas
To avert living in a disaster-prone area altogether, homeowners looking to move to a new area could buy homes based on safety ratings. Rather than move to homes in states that are likely to experience earthquakes or floods - and as a result, require separate policies - they could choose to purchase homes that are not associated with these occurrences.
4. Revise policies each year based on worth of possessions
Constantly updating policies to reflect homeowners' current financial situation is crucial to conserve money on home insurance. Rather than stick with the same policy each year, look to revise your insurance coverage depending on the value of your belongings, according to III. For instance, expensive possessions may have lost their value over time, meaning they no longer necessitate a costly insurance policy to replace them in case of an incident.
5. Increase your deductible
Since deductibles and premiums impact their overall insurance costs, homeowners may save money by paying more than the other. A Consumer Reports survey found nearly half of consumers had deductibles ranging between $500 or less on a typical home insurance policy. Homeowners could cut their annual insurance premium by increasing their deductibles to $1,000.
Through following these tips, homeowners could reduce the cost of their homeowners insurance to save throughout the time they have their house.
CoverHound offers online tools to search for home insurance quotes.