When investing in a policy that’s meant to protect you from unexpected financial costs, a cost-effective deal can offer you more value for money. In fact, according to ValuePenguin.com, homeowners who ended up researching insurance policies for approximately 15-30 minutes were able to make significant savings on monthly insurance premiums. This is mainly because comparing quotes allowed them to be informed about fair prices.
So, if you want to lower your spending on homeowner’s insurance too, here are a few strategies to try out:
1. Take Time to Shop Around
There’s a process called “price optimization” in the insurance industry where companies raise the price of a monthly premium if they don’t feel you have taken the time to shop around for a different policy with another provider. Insurance rates also vary from company to company, and so does the coverage and homeowner needs. If you don’t do enough research on your provider and their policies, you might end up paying for coverage you don’t need.
For example, you wouldn’t want to pay for flood coverage if you live in a state that doesn’t experience flooding such as Colorado or Montana. Once you’ve determined which policies best suit your needs, you can refer to an online quote database and pages like U.S. News reviews to assess which policies can provide you the best value for money.
2. Get an Auto Insurance Bundle Deal
CBS News reports that by getting your auto insurance and home insurance in a bundle package, you increase savings by up to 16%. Insurance providers want to attract loyal customers, so they give you an incentive to use their services for more than one line of insurance. It’s a business practice that benefits both the company and the customer, as the company attracts more customers, and the customer gets to save money on their policies. If you own a car, getting a bundle deal for your insurance might well be the best option.
3. File Claims Wisely
When it comes to insurance, the unexpected events that cost money to fix such as accidents and disasters are called ‘losses’. The formal request for financial compensation for a loss is called a claim. Customers that make too many claims are labeled “high-risk” by insurance providers and are thus charged higher monthly premiums. Some providers also offer discounts to customers that stay claim-free up to a certain period. It is more affordable to pay for minor expenses out of pocket than to risk being penalized financially.
4. Raise Your Deductible
Your deductible is the fixed amount you’re required to pay to your provider when filing a claim. Choosing a higher deductible cost can lower your monthly insurance payments, but at the expense of having to shell out more out-of-pocket costs in the event of a loss.
AskMoney.com, a website dedicated to providing financial advice, covers insurance topics as well. In one of their articles on insurance, they state that paying a higher deductible can help you save more money in the long run. This is because deductibles are only paid on occasion, while monthly premiums are paid regularly. If you’re confident in your ability to pay these occasional high out-of-pocket costs, or you think you’re less at risk of unexpected losses, having lower monthly payments should be worth the high deductible.
5. Invest in Home Improvements
NBC News shows that risk-mitigating home improvements can save you money on home insurance. When you invest in improvements that make your home less susceptible to losses, you will be less likely to file insurance claims, thus saving your providers money. More often than not, providers reward customers who are less prone to risk by giving them discounts or lower premiums.
Storm shutters, hurricane-resistant windows, and quality plumbing are some examples of home improvements that can make your home less susceptible to damage. It can also help to invest in a home security system and protect your home from being burglarized. Of course, these modifications can be costly, so be sure to analyze your specific situation and evaluate how necessary each improvement really is. When investing in home improvements, your priority should always be the long-term benefits. Insurance discounts are just an added bonus.
Protecting your home doesn’t have to be expensive. Sufficient research, which can start here on Live Insurance News, along with the right strategies can help you reduce the amount you pay for your homeowner’s insurance.
