Top 7 ways to save money on your home insurance
In the guide "From buying to claiming - everything you need to know about home insurance" we discussed some of the ways on how to smart shop when purchasing homeowner's insurance. In this guide we further discuss the top ways to save on your next purchase of homeowner's insurance.
1. Improve your credit score
Insurance providers, not only those who specialize in homeowner's insurance, now give weight to a customer's credit rating when charging the rate on their policies.
Insurers look at the number of claims their clients will file in one year and then price their policies based on how much will be enough to cover the minimum amount of liability. Based on several studies, consumers with low credit scores are more likely to file claims than those with higher scores. Hence, consumers with higher ratings get the better terms and rates.
To get you the better price, the following steps will improve your credit score by as much as 30 points and in as little as 30 days. These tips are recommended by the Budgeting section of The Nest.
- Reduce your total outstanding debt.
- Be on time with payments; always avoid late payments.
- Ensure that your credit report is error-free. Immediately dispute any discovered error.
- Put off any new charges on credit cards until the next billing cycle.
2. Purchase all your insurance needs from one same company
Many insurers offer package discounts. Rather than buying your auto, home and other policies from separate companies, bundling them up and buying them from one company can save up to thousands of dollars. Being a repeat customer by renewing with the same company should also save you money.
3. Increase your home security and lower your risk
Stronger locks, a burglar alarm system, shatterproof glass, stronger roofing materials, storm shutters, etc. - these not only make your home more secure and disaster proof, they can also qualify you for discounts. Increasing home security means you are a lesser risk in the eyes of the insurer.
4. Opt for paperless billing and payment
Some providers will charge their customers for paper billing and those who send their payment checks via mail. Some offer discounts to customers who opt for automatic deduction on their credit or checking accounts.
5. Update your home
If your home is an old one, updating its features can lower the level of risk that an insurer will attach to the home. Updating wiring and plumbing systems, for example, can get you discounts on your premium. The same applies to home fixtures, appliances and similar objects.
6. Being a senior citizen can get you discounts
Homeowners who are fifty-five years old or older may qualify for discounts on their premiums. Many insurance providers give out discounts to the elderly. There are also companies who offer lower rates to retirees who are likely to spend a great deal of their time in their homes and, hence, would be able to attend to a problem and probably prevent it from causing damage.
7. Make yearly appraisals
Do this not only on the home itself but also on personal items covered by your policy. The value of homes and possessions do change over a period of time. We have witnessed how many homes saw their values take a plunge at the height of the housing crisis. This is why a yearly appraisal is necessary. To reflect the true worth of the items covered by policy.