Ways to Reduce Your Home Insurance Costs

Home owners insurance costs are calculated with multiple variables, therefore there are as many ways with which home owners insurance prices can be lowered.  For example, several types of home owners insurance polices exist, and are known in the home insurance industry as HO-1 through HO-6. Each of these coverage types come with varying costs and coverage.

Understanding different home owners insurance policies and what factors into the cost can help avoid being over-insured and over charged. To pay less in home owners insurance and keep more of your money, the following home owners insurance cost savings tips can help with negotiating new and lower priced home insurance coverage.

Insurance redundancy:

If you have more than one insurance policy, make sure items or events don’t have duplicate coverage. For example, if your automobile is included in the value of property within a home, it may already be included in an auto insurance policy. Calculating which policy can cover the vehicles replacement cost can also save money.

Improve credit score:

Credit score is linked to insurance appraisals therefore having a good credit record can have more than one benefit including lower home insurance costs in addition to potential qualification for advantageous mortgage refinance rates.

Pay up front:

Paying homeowners insurance upfront can lower your annual premium by a few more dollars if you think the insurance savings will be greater than an alternative investment of the premium that could be paid monthly instead. For example, if paying upfront saves $36 dollars per year on $700/year policy that’s 5.1% savings. If you know an investment that can beat that, it may be better to pay monthly.

Compare policy providers:

Home owners insurance companies compete with each other and competition means potentially lower prices for the same coverage. Taking the time to research home owners insurance coverage costs by obtaining detailed quotes can multiply the effect of methods already taken to reduce your home owners insurance prices.

Multi-line policies:

Multi-line policies i.e. insurance coverage that is consolidated with one insurer can add bonuses to the cost of insurance. Many insurers provide this benefit and it may be worth while if the overall value of the home owners insurance can benefit from multi-line insurance coverage.

Security systems:

Door locks, motion detectors, alarm systems, non-black listed dogs, number of windows etc. can all affect the security of a home, and as with auto insurance, enhanced security can reduce home owners insurance costs. Naturally, a $5000 alarm system may not necessarily be the best way to increase security and lower home insurance, but if security can be adjusted with a 1-5 years cost advantage, it could be a good idea.

Insurance features:

Home owners insurance features include the deductible(s), excluded items, coverage options and terms. How the home owners insurance policy is structured will affect the monthly, quarterly or annual premium paid for the insurance. Optimizing these features can be done by prioritizing coverage and including more coverage for the higher priority items. Additionally, making sure items are priced correctly and logically can avoid additional redundancy and over coverage in a home owners insurance policy.

Neighborhood:

An active neighborhood watch program, community patrol or neighborhood security system may be just the way to pool resources for a net reduction in home owners insurance costs. Similarly, adjusting your or your families lifestyle so someone is always home also reduces the risk of robbery and potentially also lowers home owners insurance costs.

A.W. Berry -HomeownersInsurance.org Expert A.W. Berry is a published personal finance writer with an interest in all kinds of money matters. His professional background in finance, marketing and sales directs his reporting to pertinent local issues.