Cash In: How to Lower the Cost of Homeowner’s Insurance 6 Different Ways

November 22, 2007 By Matthew Paulson

Homeowner’s insurance is nothing more than an afterthought for most home-owners. People get home-buying fever and get really excited about the prospect of being a home-owner. They get some financing setup, look at all different sorts of houses they might like to purchase, find one they link and make an offer. The offer gets accepted, the family signs the paperwork and is told that they need homeowner’s insurance, so they quickly buy it, often without a lot of thought and continue their excitement about owning a home. They move in and never take the time to consider whether or not they made a smart purchase on their homeowner’s insurance. Most people don’t know that there are a lot of things you can do to significantly drop the monthly fee you pay for homeowner’s insurance. In fact, here’s how you can lower the price of your policy six different ways.

Raise Your Deductible – The premium that you pay is inversely proportional to the size of deductible that you have. If you have a higher deductible, you’ll pay a lower rate. Usually you’ll want to go with a higher rate because insurance companies tend to cancel you if you make a lot of small claims. Get a high-deductible and use the savings to pay for the little things that come up here and there.

Compare Prices Between Companies – It’s worth your time to go sit down with an independent insurance agent. They will be able to look through dozens of different insurance companies at once and be able to tell you which company will be able to provide you the best deal on your homeowner’s insurance. You will want to read a review of the company before signing on, because the quality of service each company offers can vary dramatically.

Quit Smoking – A very common cause of house fires is a lit cigarette. It might fall out of the person’s mouth if they fall asleep, or if they throw it into a trash can full of flammable materials. Often your insurer will give you a discount for quitting smoking!

Get a Security System – Installing a home security system will statistically decrease the likelihood that your home will be robbed. Since your premium is directly associated with the amount of risk you represent to the insurance company, you can almost always get a lower rate when you decrease the risk to insure you by installing a home security system.

Raise Your Credit Score – Insurance companies use your credit score as part of the calculation which determines how much your premium should be. If you have a higher credit score, you statistically represent less risk to them and will likely be able to save some money on your premium.

Smoke and Carbon Monoxide Alarms – Getting smoke detectors and carbon monoxide detectors (if you use natural gas), are a great way to give your family and early warning sign if there’s a fire or a gas leak. Many companies will lower your rate if you have a good amount of detectors in your home.

Homeowner’s insurance is certainly not the most exciting topic of discussion, but who doesn’t want to save a few dollars each month? Follow these tips and you’ll be able to cut back significantly on the check you write to your insurance company each month.

Posted in insurance

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