InsuranceLecturer — Homes equipped with an alarm system, smoke detectors and deadbolt locks could save the homeowner money on his or her policy premium. These above items make the home safer and more secure and will help to lower the cost of homeowner insurance.
On the other hand, if the home has an in-ground pool or jacuzzi, the homeowner might pay higher premiums. The homeowner can also expect to pay more if you are located in a higher risk area, near the coastline or raging river. If the home is used for business or is rented, insurance companies will raise the premium.
Higher Deductibles, Lower Premiums
One way to save on homeowner insurance is to raise the homeowner policy’s deductibles. Raising deductibles cuts the cost of your insurance premiums, by allowing the homeowner to assume some of the risk. For example, if the policy contains a $2,500.00 deductible, the homeowner is agreeing to pay $2,500.00 to cover any losses, before the insurance company pays a dime.
By increasing that deductible to $5,000.00, the homeowner might save upwards of 20 to 30 percent on premiums. In many cases the homeowner makes the decision whether or not to assume the risk to raise the deductibles and achieve a lower premium. But be advised, in the case of homes with mortgages the Bank generally decides for you.
Other Methods of Lowering Homeowner’s Insurance Premiums
Here are 11 additional ways a homeowner can lower insurance premiums:
- Shop around. Get quotes from several different insurance companies and compare rates.
- Buy life, home and auto Insurance from the same company. Many insurance companies offer a multi-line discount if your buy both homeowners and auto coverage from them.
- Buy a newer home. A home’s electrical, heating, and plumbing systems and overall structure are likely to be in better condition in a newer home than those of an older one. This can lead to a discount on your premiums.
- Insure the home’s structure and not its land. The home’s structures and contents are at risk from fire, theft, windstorms, and other perils. The land surrounding the home is not. Don’t include the value of the land when deciding the amount of homeowner insurance needed.
- Improve Security and Safety of the home. Installing items such as dead-bolt locks, burglar alarms, and smoke detectors can yield a homeowners premium discount as much as 5%. An electronic home-security system may yield a premium discount of 15 to 20 percent.
- Quit Smoking! Smoking accidents cause 23,000 residential fires every year. Insurers offer a no smoking discount to smoke free homes.
- Stop Smoking.
- Senior citizen discounts in as much as 10% are offered to households with at least one homeowner over the age of 55. Insurance company statistics show the presence of a retired person in the home, during the day, is more likely to prevent crime and stop home fires that might occur while younger people are working. Retired persons have more time to maintain their homes.
- Group coverage may yield a 10% homeowner’s insurance premium discount. Alumni and business associations often enter into discounted deals with insurance companies. These discounts are passed along to the members of the association.
- Stay with the present insurance company. If a homeowner has had coverage with an insurance company for many years, he or she may receive a special discount. Many insurance companies will reduce their premiums 5 to 10% depending on the length of time the homeowner has had a policy with the company.
- Check the homeowners policy annually to determine if the home has too much coverage.
Avoid state run high risk pool insurance. High risk area homeowners are often dumped into the states high risk assignment pool. Check around and see if private insurance might be available for your home.