Saving money when shopping for a homeowners insurance policy

In tough economic times, it is important to find convenient ways to save money.  Fortunately, many people can save money by cutting expenses in areas they never paid attention to expenses.  Insurance, specifically home insurance, is one of these areas.  Below are seven tips on how to save money during every stage of buying home insurance.  Everyone can use at least one of these ideas to cut off a percentage of their home insurance bill and save money.     

Shop Around

With so many insurers out there, the market for home insurance is very competitive.  Buyers can use the market to their advantage when shopping for home insurance by shopping around and comparing prices.  Just a simple Google search yields many different companies; phone books and local agencies are also good places to look.  Compare all the prices these companies offer and the different services that come with their insurance.  Only choose an insurance policy suited for your needs; paying for extra stuff wastes money.

Raise Your Deductibles

A deductible is the amount of money a person pays before the insurance companies pays out a claim.  The amount varies based on each person’s different policy, but it is usually between $250 and $500.  While it seems more expensive, a higher deductible lowers the premium of an insurance policy, meaning a cheaper monthly bill.  Low premiums make sense for the buyer because most insurers collect more in premiums than they pay out in claims.  The odds are in favor of the insurance not being needed, so it pays to have a cheaper premium instead of a cheaper deductible.

Consider Insurance Costs before Purchasing a Home

Always price in the cost of insurance when buying a house to know you can really afford it.  Also, try to buy homes that will provide a lower insurance cost.  Insurers look carefully at houses before insuring them and base the price off many qualities of the house.  Newer houses, or houses with new electrical and plumbing systems, come with a cheaper insurance cost.  Houses that prepared to withstand natural disasters of the area are also cheaper to insure, as our houses close to professional fire departments.

Don’t Insure Land

Including the value of the land surrounding a home in a home insurance policy isn’t worth the extra money.  It all comes down to risk, like everything with insurance.  The risk of insurable damage to land is very low.  Most of the potential problems aren’t covered by home insurance.  And although risk-reward ratios are more common in investing and gambling, they apply equal well to insurance (the insurance companies use them).  Since the risk is so low, any money spent insuring land is wasted.

Increase Home Security

Home insurance companies give premium discounts for homeowners who invest in personal security systems and other things that lower the chance of home damage.  The lower the chance of damage to one’s house, the lower the chance the insurance company will have to pay out claims.  To lower their risk, they offer small discounts to customers.  Make sure to ask the insurance agent what discounts the company offers before you take any action.

Stay with an Insurer

Many home insurers offer loyal customers discounts if they stay with them for a set amount of years.  After enough time, some of these discounts can reach 10%, which really saves money when combined with other discounts.  Many companies also give their customers discounts on bundles of insurance, like combining car and home insurance.  Either way, the customers saves time and money.

Check Your Policy Once a Year

While all the above tips are great for saving money on home insurance, it won’t matter if homeowners don’t analyze their policy every year.  Companies change their policies and prices every year.  Only by deciding which policy is cheapest can homeowners really know which policy saves them the most money.  Just make sure to factor everything in this analysis, including potential loyalty discounts for staying with the same company.  And even if the decision to switch isn’t made, money can still be saved by looking at the current policy and removing unneeded coverage. 

By following these tips, homeowners can save money off their home insurance and put the saved money to more important uses.  It’s like finding change under the sofa.  But remember, advice that would work for one person doesn’t always work for everyone.  Every homeowner should consult a couple insurance agents to get the best options possible for their unique situation.