How to Save Money on Home Insurance

Let’s be honest – home insurance isn’t exactly a joy to think about. It’s a necessary expense, but the cost can feel like it’s constantly creeping up. The good news is that there are absolutely ways to cut your premiums without sacrificing the protection your home needs. It’s about being proactive and informed.

May 20, 2024, marks another year where we need to take a good hard look at our finances, and that includes reviewing your home insurance. Here's a breakdown of how to save money without compromising your security.

1. Shop Around – Seriously!

This is the single most important thing you can do. Don’t just automatically renew with the same company you've had for years. Insurance companies use sophisticated algorithms to assess risk, and rates can vary dramatically from one provider to another. Get quotes from at least three to five different insurers. Don't just stick to the big names either – regional and smaller insurers can sometimes offer significantly better deals.

2. Increase Your Deductible

This is a classic way to lower your premiums. Your deductible is the amount you pay out-of-pocket before your insurance company covers the rest of the damage. Raising your deductible, even by a small amount (e.g., from $500 to$ 1000), can lead to substantial savings. Just be sure you can comfortably afford to pay the higher deductible if you need to file a claim.

3. Security Systems & Smart Home Tech

Many insurance companies offer discounts for homes equipped with security systems, smoke detectors, and carbon monoxide detectors. Increasingly, "smart home" devices like smart locks and security cameras are also recognized and can lead to discounts. Make sure your system is professionally monitored for maximum benefits.

4. Update Your Coverage Limits

Make sure your coverage limits are appropriate for the value of your home. Over-insuring can lead to higher premiums. Get an independent appraisal to ensure you’re accurately assessing your home's value.

5. Bundling Your Insurance

If you have other insurance needs, such as auto insurance, consider bundling them with the same provider. Insurance companies often offer discounts for customers who maintain multiple policies with them.

6. Review Your Risk Profile

Be honest with your insurer about your risk factors. For example, if you live in an area prone to natural disasters (hurricanes, floods, wildfires), you’ll likely pay higher premiums. Taking steps to mitigate these risks (e.g., hurricane shutters, fire-resistant landscaping) can sometimes qualify you for discounts.

7. Consider Higher Replacement Cost Coverage

Replacement cost coverage pays the actual cost to rebuild your home, whereas actual cash value considers depreciation. While higher replacement cost coverage is generally more expensive, it provides much better protection and can save you headaches in the long run.

Resources to Explore:

Consumer Reports: https://www.consumerreports.org/home-insurance/
NAIC (National Association of Insurance Commissioners): https://www.naic.org/

Don’t wait until a storm hits to start looking for better insurance rates. Taking a proactive approach to your home insurance is a smart investment in the future of your property.