by Susan Paige
On average, American homeowners pay $1,083 each year for homeowners insurance. That’s nearly 50 percent more than what homeowners paid ten years ago.
Does the idea of paying this much for insurance leave your head spinning? Do you want to lower the cost of insurance without sacrificing coverage?
If you answered “yes” to either of these questions, you’re in luck.
Read on for some helpful tips on how to save money and reduce your average homeowners insurance cost.
Factors That Affect Insurance Prices
Before we dive into the specific strategies you can implement to save money, it first might help you to know what factors influence your insurance prices. There’s a lot that goes into calculating your insurance premium, including the following:
- The amount of coverage you need
- Your location and how common natural disasters are there
- Crime rates in your area
- Fire safety precautions
- Theft precautions (alarm systems, cameras, etc.)
- Your credit score
- Your claim record
- The condition and age of your home
The materials out of which your home is made play a role, too. For example, wooden houses tend to have higher insurance premiums than brick houses, which are considered more durable.
Saving Money on Homeowners Insurance
Obviously, some of these factors are within your control and some are not. That being said, even if you have some things working against you, such as a low credit score or living in an area with a high crime rate, there are still steps you can take to lower your insurance premium.
Here are some good first steps to take to help you start saving money:
Choose a High-Deductible Plan
If you choose a high-deductible plan, you can lower your premiums by a significant amount.
There is a catch to this, though. If you have a high-deductible plan, you will have to pay more out-of-pocket for repairs or other issues before your insurance provider will start to chip in.
If you live in a relatively safe area that’s not prone to natural disasters, a high-deductible plan might be sufficient for you. Just make sure you have enough money in an emergency fund to cover you should something go wrong.
Raise Your Credit Score
A low credit score is a red flag for insurance providers. It may indicate that you’re more likely to make claims and try to get the insurance company to pay for things, which makes you seem like a riskier option (in the insurance company’s eyes).
If you want to lower your insurance premium, work on raising your credit score. Pay down your debts and keep your credit utilization ratio low. Make sure you’re paying your bills on time, too.
It’s true that it might take a while for you to get your credit score up. Once you do, though, it’ll open up a whole new world of possibilities for you.
Bundle Your Insurance Policies
Often, you can save money on homeowners insurance if you bundle that policy with your other insurance policies (such as your car insurance).
Talk to your insurance provider and ask if they offer a discount if you bundle your homeowners insurance along with your other forms of coverage. In many cases, they’ll reward you for your loyalty with a lower premium.
Ask for Discounts
There’s nothing wrong with asking for discounts directly, too. Insurance providers often have a lot of discounts available to their customers, but they don’t always advertise them. You may need to ask for what you want.
Some common discounts available for homeowners insurance policies include senior discounts and gated community discounts. You might be able to get a discount if you’ve never filed a homeowners insurance claim before, too.
Disaster-Proof Your Home
If you live in an area where natural disasters are common, take steps to disaster-proof your home. Invest in windows made of stronger glass, for example, or repair your roof so it’s less prone to leaks.
This will cost you more money upfront. However, it’ll save you from having to spend as much on repairs later, and your insurance company will appreciate the fact that you’re being proactive. They may even offer you a discount on your insurance premiums as a way of saying thank you.
Make it More Secure
Along with disaster-proofing your home, you also ought to take steps to make it more secure. Installing a security system and/or cameras can help to protect your home from theft and vandalism.
Insurance companies look kindly on things like this. After all, if you’re deterring burglars and vandals from targeting your home, there’s less of a chance that they’ll have to provide you with a payout.
To reward you for making their job easier, they’ll often give you a discount on your insurance premium.
Get Lots of Quotes
Finally, don’t be afraid to get lots of house insurance quotes before you make a decision.
If you get several different quotes, it’ll be easier for you to compare and contrast and find a policy that gives you the greatest amount of coverage at the lowest price.
There are lots of online tools that simplify this process and allow you to compare several different policies at once. Take advantage of these and don’t settle for the first quote you get.
Save on Your Average Homeowners Insurance Cost Today
Are you ready to save money?
If you want to lower your average homeowners insurance premium, give these tips a try today. They’ll help you reduce costs and keep more of your money in your bank account where it belongs.
If you’re looking for more advice that will help you stretch your dollars a little further, check out the Saving Money section of our website today. It’s full of helpful tips and tricks for people of all ages and incomes.