In part 1 of this series, we discussed the basics of homeowners’ insurances and special considerations for service members. In this section, we’ll list some strategies for saving money on your policy.
Homeowners’ insurance costs vary quite a bit from state to state and policy to policy. While there isn’t much you can do about living in a state with higher costs, there are many strategies to reduce premiums. Here are some ways it may be possible to reduce this cost.
- Shop around
This is always good advice for any purchase, but it can be easy to get in a rut with one company, even if they keep raising your rates year after year. If your rates seem unreasonable, start asking around and see who you know who’s happy with their coverage. Make sure you compare policies carefully, however, especially exclusions.
It’s easiest to switch companies at policy renewal time, but if it’s not that time of the year, don’t despair; you can still change carriers, though the process will be a bit more involved. Just be sure that you don’t accidentally go without coverage during the switch. The new company should be able to help with the process. Insurance.com has some more details on switching carriers.
- Carry more than one policy with the same company
Many companies will offer a discount if you carry more than one type of insurance (for example, car and life insurance) with them. However, be sure that this is still worth it and that both types of insurance meet your needs.
- Improve your home
Find out what type of discounts your company offers for safety and security improvements, and consider making them. For instance, you may save some money by installing simple things like an alarm system, smoke detectors, or deadbolt locks. Other changes, such as installing new wiring or a more weather-resistant roof, may cost more, but offer other benefits.
- Think carefully about “risky” choices
You may pay more for owning a pool, a dog breed deemed dangerous, a trampoline, etc. (And don’t consider lying—if you do, coverage is unlikely for any accidents associated with these items.) These are personal choices, but if cost is important, think about it.
- Ask about discounts
Some companies offer discounts for belong to alumni organizations, professional organizations, credit unions, etc. Retirees may also pay less.
- Maintain a good credit rating
Your credit score can affect what you pay for homeowners’ insurance, so keep it in good condition.
- Increase your deductible
While a $250-$500 deductible may sound like the right choice (after all, that’s still a pretty significant chunk of money), experts say it’s probably wise to raise the deductible to $1000. The accumulated savings you’ll achieve in premiums is likely to be worth it. After all, you know you’ll be paying premiums; you may NEVER pay your deductible.
- Don’t include the land value when insuring
Don’t confuse the actual value of your house with the price you paid for the house—it can lead to over-insuring. Even if your home is leveled to the ground, you won’t actually have to re-buy the land it stands (or stood) on. You should only be insured for the value of the building itself.
- Stay with the same insurer long-term
You may receive a loyalty discount for staying with the same company for years at a time. If this isn’t showing up for you, ask!
- Document your belongings
While this won’t decrease your premiums, it may make a big difference if you ever need to make a claim. You need to maintain a list of your valuables, complete with photos, serial number, brand, date of purchase, and value. Keep a copy of this somewhere safe that isn’t in your house!
Many service members choose to rent rather than own, sometimes for many years. This can be a very financially savvy decision. However, just because you live in a rental, that doesn’t mean you should go without insurance. While damage to the building isn’t our responsibility, your own valuable belongings could still be stolen or destroyed. The military does not cover these losses, even if they occur in barracks or military housing. Moving from place to place also puts your belongings at risk (and while a moving company takes some responsibility, it’s probably less than you think). Renters and those living in military housing should purchase renter’s insurance. It’s inexpensive, covers losses during moves, and provides important security and peace of mind.