How to Get a Better Rate on Home Insurance

Buying a home is an exciting journey, and one of the most important financial decisions you’ll ever make. But if you’re borrowing money to buy the home, you’ll probably be required to buy home insurance—and even if you aren’t, you should have a policy anyway.

Home insurance will financially protect you in many important ways, but in the meantime, it’s going to cost you money. Learning to shop for the best policy and save money with discounts can put you in an even better long-term position.

Buying the Right Home

First, consider the type of home you’re going to buy. Different homes will carry different insurance rates. Consider:

·         Home age. Older homes tend to be more unique, and they may have a style or charm you can’t get with a new home. Unfortunately, older homes also tend to be less reliable, and potentially built with inferior materials or standards. For example, if your home relies on old electrical wiring, it may face increased risk of breaking out in a fire. This may increase your insurance rates.

·         Neighborhood safety. The relative safety of your neighborhood may also influence your rates. Neighborhoods with low crime rates tend to have lower insurance rates than those with higher crime rates.

·         Susceptibility to damage. Certain areas may be more susceptible to certain types of damage. For example, you may be more prone to certain types of weather or natural disasters; this can influence your insurance rates as well.

Shopping for Home Insurance

Next, you’ll want to shop around for home insurance. Different companies will offer different types of coverage and different rates, and depending on how you buy it, you may qualify for one (or more) discounts.

·         Work with an agent. If possible, work with an insurance agent. They’ll be able to work on your behalf to get the best possible quote, and put together the policy that makes the most sense for you.

·         Get multiple quotes. It’s also a good idea to get multiple quotes, from multiple different companies. Try to get quotes for the same types of protection and services, so you can compare apples to apples. You may find that one company is able to offer you a much lower rate than their competitors.

·         Increase your deductible. Your deductible is the amount of money you’ll be responsible for before your insurance kicks in to pay for damages. You can increase this amount to decrease your premiums, or the amount of money you pay each month. Of course, there’s a downside here; if your home sustains damages or losses, you’ll be responsible for more money out of pocket.

·         Bundle your insurance. When possible, “bundle” your insurance together with other policies. Many insurers are willing to extend discounts to people who have multiple policies with them. For example, you can get your home insurance, and vehicle insurance from the same company to reduce the costs of both.

Lifestyle Changes and Upgrades

Depending on where you purchase home insurance, you may be able to reduce what you pay with a handful of lifestyle changes and upgrades. For example:

·         Upgrade your house. In some situations, home upgrades can save you money on your policy. For example, you may be able to replace old wiring or old plumbing to reduce the possibility of damage. You may be able to install a new roof that’s more resilient to damage, or install new heating and cooling systems.  

·         Invest in home security. You can also invest in a home security system to reduce your chances of loss due to theft. Thanks to modern technology, home security systems are more affordable than ever, and they’re relatively easy to install.

·         Ask for discounts. Ask your agent or insurance company if there are other life events or circumstances that could qualify you for a discount. For example, you may get a discount if you’re married, or if you’re retired. Pursuing these life events for the sole purpose of scoring an insurance discount may be unwise, but you can likely benefit from a status you already hold.

Review and Changes

Periodically, it’s a good idea to review your home insurance policy and make changes as necessary. For example, you may add a rider to protect certain possessions or structures that aren’t part of your original policy, or you may make updates to your deductible and insurance limits. Your needs and values will change as you grow older, so it’s important to regularly revisit your policy to keep it up-to-date.

With these strategies, you can get a better policy that fits your needs as a homeowner while simultaneously reducing your monthly costs. It may take a bit of extra effort and research, but it’s worth the investment in the long run.