8 Ways to Lower Your Home Insurance Costs

  1. Shop around for home insurance. Always get more than one quote. While you may not want to purchase just based on price, you will have a better idea of what home insurance coverage you can get at what price.
  2. Increase your home insurance deductible. This strategy works with any kind of insurance. Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim. The more you are willing to pay the more you reduce the risk to the home insurance company. The higher your deductible, the more money you can save on your premiums.
  3. Don’t confuse the cost of your home with rebuilding costs. Rebuilding costs are cost of materials and labor. You should never be including the cost of your land in the cost of the structure. If you do, you will pay a higher premium because you are insuring for a higher amount – but you won’t be able to prove that you need that higher amount when it comes time for a claim.
  4. Make your home more disaster resistant. Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. In addition, consider updating your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
  5. Improve your home security. Ask for discounts for security systems. You can usually get discounts of at least 5 percent for a centrally monitored burglar and/or fire alarm.
  6. Maintain a good credit record. Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies.
  7. Review your policy annually and adjust your home insurance accordingly. You may want your policy to cover any major purchases or additions to your home. Or you might have items insured for more than they are worth. You’ll want to reduce or cancel your rider (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference. Or you may want to add a rider for new purchases you have made.
  8. Look for private insurance if you are in a government plan. If you live in a high-risk area – say, one that is especially vulnerable to coastal storms, fires, or crime –and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative.You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.