5 Simple Ways to Save Money on Home Owners Insurance

Buying a home insurance policy is no-one’s idea of fun, but it’s an essential way of protecting your home and your wealth. But not all policies are created equal, and getting the right policy at the right price can be a difficult business.

Cutting back coverage to save money on your premiums can be a huge mistake. If you need to claim and find your policy isn’t up to the job, the hit on your finances could be disastrous.

So how can you save money without increasing that risk? Here are five simple but effective ways.

1) Shop Around

The most straightforward option for insuring your home is probably to renew your current policy every year, sticking with same insurer for an easier life. Unfortunately, this is likely the fastest route toward paying too much for your policy.

There’s little reward for loyalty in the insurance industry, and most insurers offer their most tempting prices to new customers to try and attract their business. If you just renew every year, you’ll usually find your policy gets less and less competitive.

The web makes it easy to compare prices from different insurers, so make use of the many no-obligation comparison sites that are available. You may find a much better deal by switching to a new provider, or you may be able to use your findings to negotiate your current premiums downward.

2) Check for Discounts

But even if you stick with your existing policy, you may be able to take advantage of a discount based on your age, your marital status, whether you smoke or not, and many other factors.

Lots of insurers offer these special discounts, but to get them you’ll need to ask for them. Your policy documents should have a list of which discounts are available, so check carefully, whether it’s a brand-new policy or one you’ve held for years.

View All of the Best Homeowners Insurance Discounts Available

3) Change Your Deductible Level

The deductible is the amount of any claim you’ll need to pay by yourself before the insurance kicks in to cover the rest. For example, if your deductible was $500 and you claimed $1,250 for water damage, the most you’d receive is $750.

Most home insurance policies have a deductible of some amount, even if it’s only set at $50, to discourage small claims. However, if you volunteer to raise your deductible to a higher amount, your monthly premiums will be lowered to compensate.

You can save a useful amount of money this way, but the obvious drawback is that future claims won’t pay out the full costs you’re facing. But if you can keep an emergency fund on the side to make up the deficit, you’ll likely find the monthly savings mean you come out on top financially in the long run.

4) Take a Policy Bundle

Many insurers offer discounts if you take out several kinds of insurance with them at the same time. For example, moving your car insurance over to your home insurer could mean both policies end up costing less.

However, only bundle your policies together like this if each individual policy still offers the right amount of coverage for your circumstances. Don’t let saving a few dollars a month tempt you into settling for a policy which doesn’t fully meet your needs.

5) Upgrade Your Home

Making your home stronger and more resistant to damage can reduce your insurance costs considerably. For example, storm-proofing your roof and windows can mean you’re less likely to make a claim after extreme weather, and your policy will cost less to reflect this.

Similarly, adding new security features such as motion-sensing lights will make your home less attractive to burglars, and so knock down your premiums.

Check with your insurer which potential home improvements could reduce your insurance costs, and work out whether they’d be worth investing in. For smaller upgrades you may find you’ll get your money back in as little as a year.

For most people, home insurance is a necessary part of financial life. And while it might not be the most exciting way of passing an hour or two, exploring these ways of lowering your premiums could be time well spent.