Purchasing or constructing a house, though initially quite stressful, can be one of the best investment decisions one can make. House insurance is an automatic addition which is a necessity to protect your new house from any potential risks or dangers. With a house comes house insurance. However, purchasing a home insurance policy also means that you are adding an expense to your future monthly budget by way of insurance premiums.
Home insurance is a mandatory requirement put forward by money lenders in case of the purchase or construction of a new house. Now, there are multiple factors on which your insurance premium rates depend like the age of your house, its location, type of construction, etc. There are also some personal factors which come into play which could also affect your premium rates like whether or not the applicant is a smoker, the applicant’s credit history, etc.
Home insurance premiums aren’t written in stone and can go up or down based on various factors. Here are the top 10 ways which can help you save big on your home insurance premium rates.
Maintain a Good Credit Score
More and more insurers are now taking into consideration an applicant’s credit history when it comes to deciding upon the insurance premium. A healthy credit score can easily help cut down your insurance premium costs while an awry credit score could harm your chances of getting an insurance policy altogether. To improve your credit score, try keeping your credit balances as low as possible, ensure timely bill payment, keep a track of your credit score and report any errors to the concerned company authorities and don’t avail credit in excess of what you do need.
Raise the Amount of Your Deductible
In insurance terms, deductible is the amount of money which the policyholder must pay for a loss, before the insurance company begins to pay for the claim. So, the higher your premium amount, the lower will your insurance premium be. Now, insurance companies may sometimes have separate deductible amounts depending on the kind/nature of the damage like earthquake, hail storms, fire, etc. Insurance companies to recommend customers to keep their deductible amount high, in order to save on future premium costs.
Bundle Insurance Policies
You’re out to buy an auto insurance policy being sold by a certain company. The same company is also selling a home insurance policy, the terms of which are quite favorable and suited to your needs. In such cases it might be a smart move to purchase both the policies from the same insurer as you are likely to get a discount off your premium. However, do ensure that this arrangement of combined pricing is lower than the cost of purchasing two policies from separate insurers.
Don’t Skim on Research
Purchasing a home insurance policy is quite a task, with the rising number of insurance providers now offering lucrative options all around. Take your time to go around and research on the various insurance providers offering home insurance policies. Go online, check for websites, user’s feedback, ratings, for different policies. Offline, you could check with people who have purchased home insurance and could give you valuable feedback, check with independent insurance agents who can provide you with policy deals from multiple insurers, contact the branch office of the insurance company itself and request for a quote. When you’ve done your research, you will get a fair idea about the range of services / covers being provided by various insurance providers, along with an idea about how much your overall insurance package is likely to cost you as well.
Enquire About Discounts
It often happens that insurance companies offer discounts which aren’t adequately advertised. For instance, some insurance companies offer discounts to senior citizens or retired applicants, as they are more likely to stay at home, reducing the risk of burglary. Similarly, professional associations and employers also offer group insurance policies for their employees or members, which can be availed at discounted rates.
Better Home Security Means Lower Premium
Installation of home safety gadgets and systems can easily help lower your insurance premium as it makes your house more secure from incidents of burglary, theft, fire, etc. Insurance companies offer varying degrees of discounts for installation of home safety gadgets like burglar alarms, smoke detectors, dead bolt locks, sprinkler systems, etc. However, considering that these systems are expensive and not each one of them will earn you a discount on your premium, it is advisable to check with your insurance company about the devices which will earn you a discount and how much will they help you save.
When it comes to insurance, your loyalty towards your existing insurance provider can help you save on your premiums. Often, if you have been with the same insurance company for a couple of years and are a long-term policy holder, you can receive varying rates of discount, depending on how long you have been a customer with the company.
The Newer The House, The Better
Just like auto insurance, premium rates are affected by the age of the commodity, in this case your house. Insurance companies are far more likely to offer you lower premium rates if the house in question is new. The logic working behind this is that a new house is less likely to have problems when it comes to the plumbing, heating or electrical systems. Not only that, but the structure will also be in a better shape.
Location Of Your House
The location of your house can greatly affect your home insurance premium rates. For instance, a house located in a relatively safe neighborhood with a low crime rate, will pay a lesser insurance premium, as compared to a house located in a neighborhood where burglary and robberies are rampant. Similarly, a house located near a fire station might attract a lower premium while a house located in a flood prone or earthquake area might attract a higher premium.
Insure What You Do Have, Not What You Don’t
Home insurance policies often feature adjustable limits when it comes to protection of your personal possessions. Take stock of your personal possessions and decide on the insurance cover amount accordingly.