Ever get an insurance renewal notice with a premium that skyrocketed for no reason? As a homeowner, you don’t have to pay the higher price. Shopping around for homeowners insurance can save you hundreds of dollars, if not more! The 8 steps you can take to pay less for homeowners insurance whether you’re buying a home or an existing homeowner.
Shop around for insurance
When you’re buying a home, shopping around for insurance is the last thing you want to do. It’s worth it, though, because it can save you hundreds of dollars each year. Insurance premiums vary by company so it’s likely you’ll find price differences when you shop. If this is your first homeowner’s insurance policy, sit down with your agent so he can explain how the insurance policy works.
Whether you’re a first-time homebuyer or an existing homeowner, you’ll be surprised how much you can save by shopping around for insurance. Here’s how to do that effectively.
Review your policy
Before you begin shopping for insurance, take out your current insurance policy. If you don’t have one, skip ahead to number 2.
Review the coverages and get familiar with them. That ensures you get an apples to apples policy comparison among the various carriers.
Secondly, consider the current value of your home, jewelry, and possessions. Are your coverages adequate?
Life circumstances change, so you may become over-insured as time passes. The reverse can happen too.
Check your policy limits, and reduce them if they’re too high. That will save you money on the premium.
Get 3 quotes
Once you know what’s in your policy, call three different companies for insurance quotes. Ask friends, relatives, your Realtor®, and neighbors who they use.
Research each company, as you want to make sure you choose one that helps when you need it most.
Check the Missouri Department of Insurance complaint index, to find out the average number of complaints about each company you’re shopping.
Shop more than price
Make sure you’re doing an apples to apples comparison, and not just shopping based on price. Policies vary greatly. Make sure you know what your insurance policy covers.
Grab your current insurance policy, and use that as a guideline when you’re shopping around.
Ask the new insurance agent lots of questions. You may find you have coverage you don’t need, or you don’t have what you need.
Talking to 3 new insurance companies provides perspective into how insurance works and your current coverage.
Related Link: Homeowners Insurance Checklist: What’s In Your Policy?
Raise your deductible
If you’re looking to save money, consider raising your deductible. That’s the amount of money you’ll pay upfront if you have a covered loss.
The lower the deductible, the higher the insurance premium. So, if you raise the deductible, you’ll lower your rates. However, don’t make it too high.
In Kansas City hail storms are common, so at some point, you may make a hail claim on your roof. So, it’s possible you’ll have to pay that deductible at some time.
Make sure the deductible is affordable if you have a loss.
Ask if you’ll pay the standard deductible or a special deductible for hail. Some policies have separate deductibles for hail or other losses.
Buy auto and home policies from the same insurer
It pays to purchase in bulk. Just ask Costco shoppers! Well, the same concept holds true for insurance.
Insurance companies give discounts if you buy your auto and homeowners insurance policy from them.
Update your home
If you have an older home, with electrical that’s not up to code, it may pay to update the wiring.
Before you make updates, ask your insurance carrier if it will make a difference in your premium.
While not an issue for Kansas City, if you ever buy a second home in Florida, consider hurricane impact glass or storm shutters. This extra line of defense from expected storms lowers your insurance rate.
Ask about discounts
Insurance agents know how to save money. Ask about the available discounts.
Home alarms and security cameras may save you money.
Ask before you invest, so you know there’s a definite payoff in the home improvement.
Get “clued” into the history of a home
Before you buy a house, get a “clue” about its history. The Comprehensive Loss Underwriting Exchange (C.L.U.E.) is a consumer report that contains valuable information about insurance claims on a property.
It’s helpful to buyers and homeowners.
When you’re buying a home ask for a C.L.U.E. Seller’s Disclosure Report, and review it carefully. It shows you any insurance claims within the last five years. That’s an important “clue” into problems with the home. The report removes sensitive information about the seller but includes the date of loss, type, status, the amount paid, policy type, and insurance company name.
It gives you insight into the history of a home. For example, if the previous homeowner had a water claim, check for mold.
If you’re not buying a home, but just shopping for insurance, pull your C.L.U.E. report from time to time to verify its accuracy. Like any other consumer report, including your credit report, mistakes happen. Make sure the information is accurate because it affects your insurance rates.
Be wise when shopping for homeowners insurance
Shopping around is also a great tip for long-time homeowners. It pays to keep the same insurance company, as they often offer long-term policyholder discounts. However, never get too comfortable. You should shop around for insurance rates every few years to make sure you’re getting a competitive rate. You’ll be surprised how much you can save by shopping around.
Don’t get hung up on price. Make sure you’re comfortable with your insurance policy, its coverage, and limits. Don’t make changes just to save money. You want to make sure your insurance policy makes you whole after an unexpected loss.
It’s devastating enough to lose your home to fire or lose valuables after a theft. Make sure your insurance will protect you when you need it most. At the same time, be a smart consumer and make sure you’re getting a competitive insurance rate.