Home insurance premiums can make up a big chunk of the annual expenses of a family. Insurance rates change every year, and in many cases the premiums go up. We all know that there are several variables that determine which banks will lend us money, how much insurance companies will charge us for coverage, and what qualifies a buyer. There are four main variables that may affect your home insurance rate:
- Natural Disaster Likelihood
- Crime to Population Ratios
- Pet Preferences
The good news is that there are ways in which you can optimize your insurance policy and get the most for the premium you are paying.
- Opt for a Higher Deductible
Deductible is the money you have to shell out from your pocket before the insurance policy kicks in. The higher deductible you have, the lower your monthly payment should be. This means if something happens, you will have to pay more out of pocket. But with lower monthly payments, you can build up a savings as a back up plan.
- More Claims, Higher Premium
Insurance companies take into account your claim history while determining your premium. The more claims you have filed recently on your home, the higher your insurance rates shoot up. We recommend refraining from filing a claim if the risk of incurring a rate hike far outweighs the immediate benefits of the payout you get.
- Keep Your Credit Reports Clean
Your credit score may affect your insurance cost. Ask your insurance provider whether your score has any effect on your premiums. You may be able to bring your score up in a short time with some fairly simple fixes.
- Shop Around
As with any purchase, take time to price shop. Checking with your current insurance company is a great place to start. Do not renew your policy on auto mode every year. Read through the terms and conditions, and evaluate your cost. Ask your friends and colleagues, read up financial articles, or seek the services of an independent insurance agent. If you know the going rate for insurance, you should be able to get the best rate.
Additionally, ask about discounts. You may get a discount based on your neighborhood, or through a membership you have. Safety discounts may apply. You don’t know until you ask.
- Bundle Policies
One thing a first time home buyer can do is bundle insurance policies. If you have a car, you most likely have it insured and a lot of people have life insurance too. Check with your current insurance company for homeowners' insurance, to see if keeping the policies together will save a few bucks.
So as you look at houses, keep in mind you may need to roll homeowners insurance into your payment. There are many ways out there by which you can save on your homeowners insurance. Do your research, be educated and buy yourself the most suited and adequate policy. Let us know how we can help!