Find the Cheapest Homeowners Insurance Quotes in Your Area
Homeowners insurance is not mandatory, but because your home is such a large investment, it is highly recommended you have a policy. By following a few simple suggestions, you can have a home insurance policy without breaking the bank.
Ways to Save Money on Home Insurance
The cost of homeowners insurance nationwide is about $964. The list below are the core ways most homeowners can end up lowering their home insurance premium.
- Comparing quotes
- Increasing your deductible
- Improving your credit score
- Wind proofing your home
- Installing home protection devices
- Getting the right amount of coverage
- Utilizing bundling discounts
For any type of insurance, shopping around is the key to getting the best price for your policy. In any given area there are numerous home insurance companies ready to do business with you. Astoundingly though, nearly 77% of all policy holders have not switched carriers in the past three years. Sometimes certain companies are better at pricing, other times they are in the middle of a rough streak of years so they had to raise their prices. You will never know unless you get quotes from multiple companies. For homeowners insurance in Florida for example, we found companies could differ by over $1,000 in price in the same town for the same homeowner.
Increasing Your Deductible
Going with a higher deductible is another way to save a lot of money on your home premium--though we would caution people before doing this. If you are unfamiliar, a deductible is what you need to pay out of pocket when you file a claim. It can be as low as $50, or as high as $7,500. The lower your deductible, the higher your premium and vice versa. We found going with a $7,500 deductible in Allstate for example could cut your premium by nearly 40%.
We recommend caution however because you do not want to set such a high deductible where you wouldn't be able to pay it should you need to file a claim. You also wouldn't be able to file a claim for smaller incidences if the deductible is too high. You want your deductible to reflect the highest amount you'd be comfortable paying out of pocket at any given time in the year. For most homeowners, we would recommend a $1,000 deductible which can save you around 15% on your payments.
Improving Your Credit Score
While the merits of the practice are debatable, it is undeniable that bad credit leads to very expensive home insurance rates. As we discuss here more in depth, people with poor credit could pay as much as 91% more than people with great credit. Improving your credit score is easier said than done, but the benefits would be widespread for not just your home insurance but car insurance too.
Wind Proofing Your Home
Wind proofing your home can fetch you a small discount on your premium. If you install storm shutters on all exterior openings to your home, like doors, windows and skylights, you would qualify for the discount. In this case however you need to consider whether the discount will be worth the expense of wind proofing your home. We found at Allstate for example, you could get a 2% discount for installing the shutters.
Home Protection Devices
Security and anti-fire devices are another way to reduce your home insurance premium. Just having a smoke detector on every floor, a fire extinguisher and deadbolt locks on every exterior door gets you a 5% discount. A local burglary alarm will net you an extra 5% discount as well. If you have a burglary alarm that alerts the police, in addition to sprinklers in your home for fire, you can get a discount as high as 15%.
Having the same company be your home and auto insurer is another way to net 3% to as high as 30% savings. In New York, Allstate customers can save 25% on their homeowners policy by also being a auto insurance policyholder as well. Ultimately, you will need to see if your base premium at both companies will be cheaper or more expensive than having separate policies at different companies. You don't want to have an Allstate home and auto policy if your combined premium after the discount is more expensive than having a home insurance policy with Allstate and an auto policy with GEICO as an example.
Getting the Right Amount of Coverage
You want to have as much protection as you can afford, but you also don't want to pay for protection you don't need. For the vast majority of home insurance policies you will need to speak to an agent, who will guide you in how much coverage you need. In some cases though your agent may not be thorough enough in assessing how much coverage you need. Remember your policy should reflect the value of your home and its contents. It does not need to reflect the value of the land it sits on, so make sure you are not including that in your coverage.