12 Best Ways To Save on Home Insurance in 2023
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You can save money on your homeowners insurance by shopping around for the best price and taking advantage of various discounts. You can also lower your rates by raising your credit score, as this helps determine what you will pay for coverage. Also, be sure to make renovations to your home, such as updating your plumbing, electric and heating systems as this will help lower your insurance costs as well.
If you’re buying your next house, your first home or you need new coverage, keep reading to find out the best ways to save on your homeowners insurance.
1. Shop Around and Look for Additional Discounts
One of the best ways to save on homeowners insurance is to shop around. Insurance providers will offer different rates, so it is important to compare rates. But don't only look at the cost. Your insurer should offer a fair price but also deliver the service you need when filing a claim. After comparing rates, do an online search for insurance companies, ask your friends who their coverage is through or contact your state insurance department.
When searching online, visit the National Association of Insurance Commissioners (NAIC) website. You’ll find information that will help you find an insurer in your area, including reviews and complaint histories. Also, be sure to look up the financial stability of the insurance providers you’re looking at with rating companies such as Standard & Poor’s.
Once you’ve narrowed down your search, look into discounts. Doing so will help you save even more on your homeowners insurance. Discounts may include:
- Claims-free discount
- Green home discount
- HOA discount
- New home construction discount
- No-mortgage discount
- Military discounts
- Retiree discount
- Pay-in-full discount
2. Bundle Your Home and Auto Insurance
Bundling means purchasing multiple insurance policies from the same provider such as homeowners insurance and auto insurance. Bundling not only simplifies the management of your policies, it increases the ease of filing claims and can also result in substantial discounts as high as 25%.
Most major insurance providers allow you to bundle home insurance and car insurance. Below is a list of those insurance companies:
- American Family
- Liberty Mutual
- State Farm
- The Hartford/AARP
3. Improve Your Overall Credit Score
Improving your FICO score can help get you a better rate on your home insurance. Providers will consider several factors when calculating your rates, including your credit history and score. The reason insurance companies do this is because there is a correlation between having a poor credit score and filing claims. And while your insurance is designed to protect you in case you do have to file a claim, you should only do so if you can’t shoulder the cost of repairs.
Equifax, one of the nation's leading credit bureaus, states that a score between 670 to 739 is good. Anything lower than this, and your carrier may charge more for premiums. The lower the score, the higher the rates.
If your score is low, you can raise it by doing a few things. Bring your credit utilization below 30% so that you only owe 30% of your total credit or less. If it’s over 30%, pay down any debt you can without causing financial hardship.
Pay your bills on time and in full when you can. Also, look at your credit history and see if there are any mistakes or discrepancies on it. Many of the big credit bureaus have ways for consumers to file for corrections. Fixing these problems will also help raise your score.
4. Increase Your Deductible
Increasing your deductible will help lower your homeowners insurance premiums. Your deductible is the amount of money you pay out-of-pocket in the event a covered loss occurs. Only after you’ve paid the deductible will your insurance kick in and cover the rest. The idea is the higher your deductible, the lower your monthly payment.
A deductible is usually anywhere between $500 and $2,000. However, your provider may have a separate deductible if you live in an area that is prone to disasters, such as a windstorm deductible, hail deductible or earthquake deductible.
5. Evaluate How Much Insurance You Need
Your needs are going to be one the biggest factors when calculating the price you pay for insurance. There are several things to keep in mind when deciding how much insurance to get. Do you have enough coverage to:
- Cover damages or injuries that occur at your home (liability)
- Rebuild your home (extended dwelling coverage)
- Reimburse your living expenses if you can’t live in your home (additional living expenses)
- Replace your belongings (personal property)
6. Make Your Home More Disaster Resistant
Making your home more disaster resistant will lower your insurance costs because you will be less likely to file a claim with your provider. Contact your carrier and ask what you can do to help make your home more resistant to the elements. Possible upgrades include:
- Storm shutters
- Reinforcing your roof
- Modernizing your heating
- Modernizing your plumbing
- Modernizing your electrical systems
- Ensure your home is properly bolted to the foundation
7. Install Smart Home Technology
Smart home technology can help bring down your home insurance rates. These devices are designed to notify you and/or shut down elements of your home in the event there is a breakage of some kind. They are also meant to provide the user with quick access so they can manage the setting of their home. Smart technology includes:
- Household monitors - Senses power surges and water failure and shuts off the corresponding system, mitigating potential damage to your home.
- Smart locks - Allows you to control the locks on your house remotely.
- Smart thermostats - Settings can automatically adjust according to your needs. They can also report when filters need to be replaced.
- Smart lighting - Can detect when occupants are present and will adjust accordingly.
8. Install Antitheft Devices
You can potentially lower your rates by installing anti theft devices, which can secure your home and belongings, helping you avoid having to file a claim with your carrier. By having anti theft devices, the insurance company will see that you are less likely to file a claim because you are being proactive about protecting your belongings.
9. Get Rid of Risky Items
If you have recreational equipment on your property that can potentially hurt someone, consider getting rid of them. Liability coverage is standard with homeowners insurance, and it protects you in the event someone is hurt or their property is damaged while at your home. Items such as trampolines, pools and playground sets could potentially drive up your prices because they are seen as potential hazards. If you want to keep these items, create secure fencing to make sure passersby or children can’t access these attractive nuisance items.
10. Consider the Cost of Homeowners Insurance When You Buy a Home
Part of being able to save on your homeowners insurance is making the right choice before you ever purchase a home. You could pay lower rates if your home is near a professional fire department instead of a volunteer one. Additionally, you could save if your home is situated near a fire hydrant. You’ll also pay less for home insurance if things like electrical, heating and plumbing systems have been updated or are newer. If you live where wind storms can cause massive damage to structures, you could save if your home is made of brick. Similarly, those who live in locations where earthquakes are common may save on their insurance plans by buying a home with a wooden frame.
Contact the Comprehensive Loss Underwriting Exchange (CLUE) to get the report for the home you're interested in.
11. Don’t Smoke
Insurance companies will take into account the smoking habits of occupants when calculating insurance costs. Smoking generates a risk insurance companies would rather avoid, namely, causing fire damage to your home if not burning it down completely. Therefore, smokers pay up to 20% more on coverage than non-smokers.
12. Stay With the Same Insurer
Many insurance companies offer a loyalty discount for customers who have stayed with that provider for a predetermined amount of time. The loyalty discount can save the insured up to 25% on their rates.
Whether you’re buying your first home, buying a new one or just trying to find a better deal, SmartFinancial has you covered. Enter your zip code below or call 855.214.2291 to receive free home insurance quotes from agents in your area offering the lowest rates.