Saving money on home insurance includes examining the deductible, bundling with other types of insurance, and shopping around.
The Top Line
- Home insurance is very necessary to protect your home from any number of events that might result in damage to your home.
- The policy that you choose isn’t the only thing that matters. Take care to select a home insurance provider that you will work well with.
- It’s generally best to keep your home, car, and other insurance in one place if your insurance company offers bundles for a discount.
Part of homeownership is having home insurance in place that will pay out set amounts for damage occurring to your home. It is essential to have home insurance if you are a homeowner because the damage that can occur to homes is often expensive and more than what many homeowners can afford.
Home insurance can help you to address these repairs without incurring significant debt or financial hardship in the process. However, the method of picking home insurance can sometimes be overwhelming with all of the options available and all the decisions that have to be made during the process.
This guide to the top five tips for choosing home insurance will help you to focus on a few key aspects of picking home insurance and what you should expect from various parts of the home insurance selection process. With this knowledge in hand, you can get the most out of your home insurance and be sure that you pick the right one.
Insurance Company Choice Matters
When you are browsing dozens of listings for home insurance online, you may be paying a lot of attention to the prices that you are seeing. However, price shouldn’t be the only factor that you pay attention to. If you truly want to have the best experience possible when picking home insurance for your home, then you will also take a close look at the company that you choose to work with.
In many ways, the company that you choose has as much of an effect on your home as does the home insurance policy. Yes, the price is important, but what good is an affordable home insurance policy that a less reputable insurance company won’t even agree to pay out the policy and honor it. You want to work with a company that has affordable options, but also has a reputation for treating their policyholders right.
You also want to examine the financial stability of the insurance company. If a lot of claims are made to an insurance company, you want to be sure that it is able to make the payments. Some companies that provide financial ratings of insurance companies include A.M. Best, Standard and Poor’s and Moody’s.
Bundle When Possible
One of the best things that you can do when picking home insurance is to select a company that has a bundle discount. If you have other insurance such as life insurance and car insurance, you can often bundle these insurance policies with your insurance provider to get a discount and a more affordable rate. This is almost always advantageous, but don't limit your options of course. Make sure to shop around and ensure you are getting the best rate, regardless of whether your current company offers a bundle or not. Generally speaking, a bundle provides you with the best option to save money on your home insurance.
Raise the Deductible
One of the most common strategies that is used to pick home insurance that is affordable and appropriate for your needs is to pick a policy that has a higher deductible. The deductible of your insurance policy is the amount that you need to pay each time that you file a claim for a specific incident that requires insurance. If you are able to raise this deductible, you will enjoy a lower rate. However, this depends on your ability to pay a higher deductible should there be a reason to file a claim with your home insurance.
Generally, it is advised that you do raise the deductible for your home insurance if you want to enjoy a lower monthly payment. However, you should select a deductible that you will be able to afford. You should try to find a home insurance provider that has the best value when it comes to deductible and monthly payments.
Ensure You Have Appropriate Coverage
When you purchase home insurance for your home, you always want to make sure that you have the appropriate coverage. What appropriate coverage means is going to be different for each home and homeowner. What we mean by appropriate coverage is that your home has the right coverages for the environment that it is in. For instance, a home on the river is more likely to need flood insurance than a home that lies in the desert. The region and geography that a home is a part of play a huge role in determining which kind of coverage you are going to need and where that coverage will need to be allocated.
Luckily, modern insurance companies have made this easy. Many of them have easy-to-use online quote tools that will ask you to input your home’s information and location and give you a quote for coverage that would be appropriate for the risks that are most likely to present themselves to you as a homeowner. With these tools, it is easier than ever to ensure that you have the appropriate coverage. Nobody wants to be the homeowner who has too much of a non-relevant policy on their home and not enough of the one that they actually need. If you want to avoid this problem, it’s best to be careful in choosing your coverages and ensure that they apply to your unique situation and property.
Note as well that if you are in an area that may be subject to floods or earthquakes, you will need a separate policy for each of these. Home insurance alone does not cover damage from floods or earthquakes.
Pay Yearly Instead of Monthly
Many people don't take advantage of this little secret because it requires some self-discipline and savings, but it can help you save up to a couple of hundred dollars a year. For some people, paying monthly makes them feel better because the payments are spread out throughout the year. For those that are intent on saving money, however, it is smart to pay yearly. The reason for this is that many home insurance companies will offer a discount incentive to homeowners that pay once a year for the convenience and security of receiving the premium for the year all in one go. If your home insurance company offers a discount for yearly payments, it would be wise to take advantage of that opportunity.
Home insurance is a very important part of homeownership. However, it can be expensive and confusing. With these helpful tips, you now have the knowledge you need to navigate home insurance in an effective, affordable way that empowers you as a homeowner and saves you money over time.