Getting the Best Price on Your Home Insurance

 Everyone wants to get the lowest price possible on their homeowners insurance, but you should first make sure you are getting the best coverage to suit your needs. Here are a few ways to get improved pricing on your policy.

1.   Package Your Policies -- Most insurance carriers have added discounts for insuring both your home and auto with one carrier. You could be saving as much as 30% if you package your policies together. Some even offer one deductible should you have a claim that involves both your autos and home. Before switching your home insurance it is always best to compare the coverage that you now have to the new coverage being offered. Don't sacrifice protection to get a lower price on your policies. In the end, it just won't be worth it.

2.    Raise Your Deductible -- The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $1000 deductible and you file a claim for $5000 in damage to your home, you pay the first $1000 and your insurer pays the balance of $4000. As you increase your deductible, the less you pay for your policy.  Of course you risk more out-of-pocket if you have a claim, but you save on your premium each and every year. Make sure that the amount of savings is great enough to increase your deductible.

3.    Newer Is Better -- Buying a house? You will most likely get better pricing for a newer home.

4.    Location, Location, Location -- Where you live will impact the cost of your home policy. Chose a home with fire hydrants and fire department nearby. The better the response time of the fire department the better the pricing. Moving to a coastal area - insurance pricing will most likely be higher, plus you may be required to purchase flood insurance. Certain "territories" or zip codes that have a high claims history could also affect the cost of your policy.

5.    Replacement Cost -- To insure your house the carrier will start with the rebuilding cost or replacement cost of your home. If your policy calls for the rebuilding of your home that means that the carrier will estimate what it would cost to replace your home today. Each carrier has their own formula. You always want to make sure that your home is insured to the full replacement cost so if there is a claim you are not penalized. Review the replacement cost from time to time as these costs can change especially if you've made substantial upgrades.

6.    Don’t Insure What You Don’t Have – Your home policy includes an automatic protection limit for your personal property.  This amount may be adjustable.  If you don’t need all that protection you may be able to lower it to save some money.  But be careful.  You may also need more.  Your agent should help you with a quick personal property calculation.  Also, pay particular attention to items subject to special limits, such as jewelry and computer equipment.

7.    Being Safe Pays You Back -- Smoke detectors, burglar alarms and deadbolt locks are usually worth discounts of at least 5% on your home policy.  You may get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company.  However, not all of these systems qualify for discounts with all insurers.  Before you install one, check with your insurer to find out what type of system qualifies for a discount and how much you would save on your premium if you installed the system.

8.    Where There’s Smoke . . .  -- There’s fire. Smoking (unattended cigarette butts, etc.) produces more than 23,000 residential fires in this country each year. That’s why some insurers have discounts if all the residents in a home are nonsmokers.

9.    Don’t Jump Around -- If you’ve been with an insurer for a while and you like that insurer, stay put. Some insurance companies apply discounts for policyholders who have been with them for a certain number of years. When working with an Independent Agent we represent several insurers so we can see if staying with the same insurer is beneficial for you.

10.    Monitor Your Automatic Inflation Adjustment – Virtually every home policy includes an automatic inflation adjustment every year.  This means the company automatically increases your Dwelling Limit every year.  The idea is to keep up with the rising costs of rebuilding your home and make sure your insurance will completely rebuild your home.  That’s a good thing!  But over time this automatic inflation adjustment can get out of whack with reality.  If you think your Dwelling Limit is too high, ask your agent to run a new replacement cost estimate.  You may be able to lower your costs while still being fully protected.

11.    Know and Manage Your Credit Score– Most companies these days use your credit history as part of their pricing structure.  People with better credit will pay less for their insurance in most cases.  So, not only is improving your credit rating a good idea by itself, it may also reduce the cost of your insurance. If you know that your credit rating has significantly improved since getting your insurance let us know and we can see if it has an effect on your premium.