Ways to Cut your Homeowners Insurance Premiums

Homeowner insurance is something that you need to protect the value of your house. Many of us, however, end up paying considerably more for home insurance than we need to. The good news, though, is that there are a number of ways that you can minimise your home insurance premium, which I’ve detailed in this article.

We’ll start with people who have an existing homeowner policy in place. For you, the key thing is to regularly check to make sure that the premium you’re paying is competitive. In the same way that you’re not obliged to stick with the one mortgage provider forever, you can also switch your home insurance provider if you find better value elsewhere. This is something that I did earlier this year, when my existing policy was coming up for renewal, and I found that I was able to realise quite a substantial cost saving. I’d made that all too familiar error originally of taking out my home insurance with my mortgage provider. It might have been a convenient choice but it wasn’t financially sensible.

The emergence of price comparison websites has made it easier for consumers to check that they’re getting value for money. Remember, however, that price isn’t the only thing to consider. You need to make sure that your policy covers the things that you want it to cover, so check the features and any listed exclusions.

The next set of comments relate equally to existing policy holders, or to people looking to take out home insurance for the first time. The key thing to remember is that home insurance premiums (i.e. the price) are based on risk assessments by the insurance provider. Anything that lowers the risk of damage to your property, therefore, is likely to lower the cost of your premiums. Some of the things that insurance companies take into consideration include:

– Having an approved burglar alarm
– Having approved locks on all windows and doors
– Being part of a Neighbourhood Watch scheme
– Lifestyle considerations. Insurers may offer lower premiums for non smokers (less risk of setting your house on fire!)

The other thing you can do to cut premiums is to increase the excess value. Excess is the amount you would contribute if and when you make a claim on your policy. Sometimes you can ask for a higher excess (e.g. 500 rather than the standard 50) in return for lower premiums.

Paying a single yearly premium, rather than monthly direct debit payments, may also bring a saving. The reason is that some insurance providers don’t offer interest free monthly payments!

Look out for expensive and unnecessary add-ons. For example, some insurers may charge more for cover for accidental damage, bicycles, etc. Only take these extras if you really need them.

Finally, consumers often take out buildings and contents insurance from the same provider. Whilst this, again, can be convenient, you may actually be better pricing them separately and buying each of them from the lowest cost providers that you can find.

Taking a little bit of time to shop around for the best policy may end up saving you quite a lot of money, especially if you factor in that you’re likely to require home insurance for at least 20 or 30 years. A 100 saving this year (c. $200) might not sound like a huge amount but multiply that by 30 years and you will have made a very considerable cost saving.