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Monthly Archives: June 2016

7 Tips to Save Money on Homeowner’s Insurance

By | Educate, FAQ, Personal Insurance | 25 Comments

homeowner's insurance[Photo Credit: mschellhase]

Are you a homeowner? Do you think you pay way too much money for homeowner’s insurance? You are not alone as many Americans do not understand the full value of homeowner’s insurance until a tragic event occurs. However, after purchasing a home, homeowner’s insurance is essential. Here are a few concepts that you should know that will save you money on homeowner’s insurance.

Homeowner’s insurance can be an unpleasant process when you are paying way too much for a policy that does not provide sufficient coverage. When you know these 7 Tips to Save Money on Homeowner’s Insurance the process of finding the right homeowner’s insurance policy with the best company becomes simple. Knowing 5 Ways to Save Money on Auto Insurance helps too. By knowing these tips, not only will some insurance companies reward you with a discount, but you will also be creating a safer environment for you and your loved ones.

 1. Multi-policy discount

A homeowner’s policy paired along with an auto insurance policy is one of the most cost effective and convenient ways to save money. Most insurance companies will reward you for packaging your home and auto policy together. Traveler’s Insurance is one of these companies that offer a multi policy discount.

In addition, some auto policies differ in length and renewal dates compared to homeowner’s insurance policies. Paying multiple bills can start to get confusing when different renewal periods come around. Instead of keeping up with renewal dates and separate checks, buying two policies through the same company will be able to provide convenience as well.

 2. Preventive Device Discount

For the most part, this discount is almost a given if you live in a house that was not built before the 1950s. The preventive device discount is offered by a majority of companies that reward people for implementing devices that will prevent or limit the damage to your home.

For example, if you have working smoke alarms placed strategically throughout your house then you have most likely earned yourself a discount. Smoke alarms are great for insurance companies because they lower the overall risk of a fire. The National Fire Protection Association demonstrates how to install a smoke detector on your own. Having smoke alarms will help prevent a fire from happening and it will also prevent you from filing a claim that would increase your monthly premium. Now that you know the benefits and how to install a smoke alarm, there is no excuse to miss out on this opportunity to save.

The same goes for burglar alarms. These devices notify the owners of the house that someone has broken in or is trying to break in. Not only will burglar alarms prevent thieves from creating one costly claim, but it will be rewarded by some insurance companies.

Fire and theft are two big concerns for homeowners which make burglar alarms and/or smoke alarms great ways to minimize the risk for filing a claim. That is why these devices are rewarded by some insurance companies. Call your insurance agent today to see if you received a discount.

3. Claim Free Period

Insurance is all about controlling risk. A large group of people pay small amount of money (respectively) to cover the expense of a handful of tragic events. However, everyone must be insured as a tragic event could happen to any one of us as we all having some degree of risk associated with our property.   A riskier option you are or may become makes you less appealing to an insurance company. The amount of risk explains why the same amount of coverage for one individual might be higher than the other.

You may be wondering how insurance companies will determine risk for a homeowner’s policy. There is a strenuous process of assessing risk upon each individual homeowner’s policy situation as this is known as the underwriting process. During this process, underwriters look at a multitude of factors including: age and condition of electrical – plumbing – HVAC & roof systems, credit score, year the house was built, upkeep and amount of claims on the property. As a big factor on influencing premium prices, the frequency and severity of claims made on the property can drastically change how much you pay.

On average, one claim will increase your monthly premium by 9%. That might not seem like a lot but it will definitely add up once those bills consistently come in at a higher rate. With that being said, 9% is the overall average and each state varies. Click here to see how your state compares.

As you can see, one claim will affect your rate. This is because one claim most likely leads to another. In addition, property that includes a track record with past claims does not look good. Property with zero claims compared to property with more than one obviously looks more of a risk adverse option for insurance companies. This is why some insurance companies offer discounts to customers that have a clean record with no claims during a period of time.

It is not easy to avoid claims and you will get rewarded by doing so by a handful of companies. Minimize risk and avoid filing small claims to minimize that monthly premium.

4. Newly renovated or recently purchased

Think about it from the perspective of an underwriter for an insurance company, which houses would be great candidates for homeowner’s insurance policies? Newly renovated or recently purchased homes. Here’s why.

Roofs are one of the first things that underwriters are curious about when they are in the process of evaluating risk for a homeowner’s insurance policy. A roof that is poorly installed or very old can cause many problems. These problems can come in the form of leaks, collapses, and severe damage to the inside of a beautiful home.However, newly renovations and new home buyers should always look at the condition of the roof when considering buying or making renovations, because it is one of the most important aspects of the house.

Also, knob and tube wiring versus circuit breakers are a topic of interest for insurance companies when writing a policy for homeowner’s insurance. Knob and tube wiring are definitely a reason for concern as this was the method used for houses in the 1930’s and beyond. This method is not only outdated by current technology, but it is dangerous. Knob and tube wiring exposes the wiring and increases the risk of accidents. See a picture of this method to see if your home has it.

Avoid this knob and tube wiring and have a certified electrician examine your home. They will implement a more modern system such as circuit breakers which will ground the wiring and provide a safer alternative. As a result, a handful of insurance companies will reward you with a discount.   These are only two of many aspects of your house that need to be updated and renovated that will end up saving you money in the long run. Call a home inspector today to see if you need any updates!

5. Loyalty discount

Loyalty is something that gives more meaning and attachment between two things. Varying degrees of loyalty are present in our relationships with loved ones or coworkers, the attachment we have with our current jobs, and our dedication to certain brands. Either way, we are faced with struggles of staying loyal and it is becoming harder during this day and age as options continue to grow.

The Bureau of Labor Statistics came out with a study in 2015 that said that the average person before the age of 40 will have on average, 10 jobs. It is very rare that a person has the opportunity to stay loyal to one job for their lifetime. Check out this link to see how many jobs on average are predicted for millennials.

This statistic along with many provides evidence that loyalty is hard to come by. As a result, loyalty will be rewarded by some insurance companies when it comes to buying homeowner’s insurance. Loyalty may be judged different depending on the company. Call your insurance agent today and see if you qualify for a loyalty discount (if applicable).

6. Early bird discount

Insurance companies want clients that are going to be low risk so they can make money. They want to insure people that are dependable. That is why an early bird discount is in place.

Some insurance companies offer a discount to individuals that shop for their homeowner’s insurance policy far in advance of their renewal date. A person that allows insurance companies enough time to write the right policy for them by having enough time to do so deserve a discount. The people that wait last second until their renewal date will simply not receive the discount. This is easy money saved people!

P.S. Do not get too excited as not all insurance companies offer this discount when issuing homeowner’s policies.

7. Elderly discount

Being considered elderly is not that bad, as it has its perks. Studies have shown that people above the age of 65 are actually one of the happiest groups of people. Think about it. At this time, you are most likely retired, have the opportunity spend more time with family, have grandkids and receive many discounts at restaurants. However, the best reason for getting old is that you receive a discount on your homeowner’s insurance premium for the most part (just kidding, there are better things).

Strive to live long healthy lives so you are able to receive this magnificent perk of becoming old along with many others.


That’s How you Save on Homeowner’s Insurance

This wraps up 7 Tips to Save Money on Homeowner’s insurance. A homeowner’s insurance policy can become expensive. Insurance companies offer different ways to save you money. All you need to do is find out what they are and start implementing these money saving strategies today.

Keep in mind that all insurance companies offer different discounts for homeowner’s insurance. These are only seven of many ways to save money on homeowner’s insurance and many are not on this list such as varying your deductibles. Not all of these tips listed above will guarantee a discount for your homeowner’s insurance policy so it is your job to become more educated on your policy. This way you can save hundreds of dollars each year by simply implementing strategies that will create a safer environment for you and your loved ones.

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