Tips for Cutting Insurance Cost

While it is never a suggested idea to cut corners on coverage, there are ways to save money on insurance premiums. Some helpful tips include the following:

Keep a security system in place.

A burglar alarm monitored by a central station or that is directly linked to a local police station can help reduce a homeowner's annual premiums by 5% or more. To qualify for the discount, the homeowner must usually provide proof of central monitoring in the form of a bill. A contract to the insurance company works too.

Another critical factor to consider is the use of smoke alarms. Even though they are standard in most modern homes, installing them in older homes can save the homeowner 10% or more on annual premiums. Other applicable protections are CO detectors, deadbolt locks, sprinkler systems, and, in some cases, weatherproofing.

Increase your deductible (bad idea)

As with health insurance or car insurance, the higher the deductible, the lower the annual premiums. On the other hand, an increased deductible means that claims/problems that typically cost only a few hundred dollars to fix, such as broken windows or damaged sheetrock from a leaking pipe, will almost certainly be absorbed by the homeowner. And it's easy for these to accumulate. We strongly recommend utilizing other methods instead of increasing your deductible.

Search for multi-policy discounts

Many insurance companies provide a 10% or higher discount to customers who have multiple insurance contracts under the same roof. Auto or health insurance are good examples. Consider getting a quote for other types of insurance from the same company that provides your homeowners insurance. You could save money on two premiums.

Plan ahead of time for renovations.

If you intend to build an addition or an adjacent structure to your home, consider the materials that will be used. Because wood-framed designs are highly flammable, they tend to be more expensive to insure. Systems made of cement or steel, on the other hand, will be less costly because they are less likely to be destroyed.

Assess your most valuable possessions regularly to see if you have enough coverage to replace them. "Many consumers are under-insured with the contents portion of their policy because they have not completed a home inventory and added the total value to compare with what the policy covers," says John Bodrozic, co-founder of HomeZada, a home maintenance app.

Repay your mortgage

Pay attention to changes in the neighborhood that could lead to lower rates. Installing a fire hydrant within 100 feet of a home, for example, or erecting a fire substation near the property, for example, may result in lower premiums.

Another factor that most homeowners should think about but often do not is the insurance costs associated with building a swimming pool. Pools and other potentially hazardous devices (such as trampolines) can increase annual insurance costs by 10% or more.

Conduct policy reviews and comparisons regularly.

Homeowners who own their homes will almost certainly see a reduction in their premiums. Why? The insurance company believes that if you completely own a home, you will take better care of it.

Whatever the initial price you're quoted, you should shop around. Look into group coverage options through credit or trade unions, employers, or association memberships. Even after purchasing a policy, investors should compare the costs of other insurance policies to their own at least once a year. Furthermore, they should review their current policy and keep track of any changes that may have resulted in lower premiums.