Property Insurance Costs Too Much? 7 Ways to Reduce It
When is the lowest-cost insurer not the lowest-cost insurer? When another company actually charges less because you bundled or installed security or did something else.
NEW YORK – The price of homeowners’ insurance is on the rise, and many owners may be looking for ways to reduce their high premiums. While discounts can vary greatly based on location, size, and age of the house, some credits may be available that could reduce some homeowners’ premiums by as much as thousands of dollars per year, The Wall Street Journal reports.
The average premium for a homeowner’s insurance policy increased 3.1% to $1,249 in 2018, the latest year for which data is available. Luxury homes tend to be much more costly to insure than standard homes since they’re larger and have more decorative features within.
Here are some ways homeowners may be able to save on their homeowners’ insurance costs:
Bundles: Look into bundling a policy – insuring a home, car or boat all with the same firm. Some homeowners report a 12% reduction in their premiums by doing this.
Security: Some homeowners find they’re eligible for a reduction by having an alarm system in their home, up to 10% in some cases. Homeowners who live near a fire station or hydrant also may be eligible for a discount.
Disaster prevention: Some credits may be available for installing a water sensor to detect leaks, which could provide a 2% credit from some agencies. Owners in disaster-prone areas who install hurricane-protected windows or shutters could also see discounts.
Updates: Many homeowners updated parts of their homes during the pandemic, which may make them eligible for a discount. For example, replacing a roof or windows or updating the electrical system could lower the risk to the insurance company, which may justify a lower premium.
Green upgrades: Some homeowner insurance companies, like Travelers, offer a 5% discount for a green home that is LEED-certified.
Claims-free: Also, homeowners who have had no claims for several years may be eligible for a “claims-free” discount.
Compare policies: More than a quarter of Americans say they never compared insurance quotes, according to a March survey from ValuePenguin. But those who did said they were able to save money. Homeowners with existing policies also should consult their insurance agent to check into discounts they may be eligible to receive.
(Source: “Want to Lower Your Homeowners Insurance Premium? There Are Discounts for the Taking,” The Wall Street Journal )
I will add two more suggestion3: consider insuring your contents based upon actual cash value rather than replacement cost. The difference is that replacement cost insurance pays for the full replacement cost of your items, whereas actual cash value insurance only pays for the depreciated value. And consider increasing the deductible. Both these will lower the premium paid while increasing the amount you will have to pay for any claim.
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