Ten Ways to Save on Your Homeowners Insurance
Today’s home-based businesses range from home day care centers to high-powered sales offices handling multi-million dollar contracts. Regardless of the scope of your business, if you work at home, you have insurance needs that go beyond your homeowners policy.
- Get a preliminary insurance quote before buying a home. Two properties of similar size, features and quality of construction can face very different risk exposures, which will affect your insurance costs. For example, you’ll pay more to insure a home in a high-crime area than in a safer area. Likewise, you’ll pay more to insure a home in an area with a high risk of wildfire. It costs less to insure a house close to a hydrant or in a community with a professional rather than a volunteer fire department.
- Look at the home’s age and construction. Newer buildings—or those whose electrical, heating and plumbing systems have been updated within the past 10 years—cost less to insure because these systems are less likely to fail and cause damage. In an earthquake-prone region, a wood frame building bolted to its foundation costs less to insure than a brick or masonry building. Conversely, you’ll pay less to insure a masonry or brick home in an area prone to windstorms.
- Consider flood and earthquake exposures. Homeowners policies exclude coverage for flooding and earthquake damage. You can buy these coverages separately, but they will add to your overall insurance costs. In certain coastal areas, such as Florida, your policy might also have a separate (higher) deductible for windstorm damage, meaning you’ll have to bear more of the cost of wind-related damage yourself.
- Insure your building and contents only. Don’t base your insurance limits on your home’s market value. Much of the value of a single-family home lies in the land. Even if a fire or windstorm leveled your house, you would still have the value of the land.
- Get a quote on homeowners insurance from your auto or personal umbrella liability insurer. Most insurers will give you a discount if you buy more than one policy from them. Discounts usually range from 5 to 15 percent. Before committing, however, check whether the discounted policies are in fact cheaper than buying policies separately.
- Install protective devices. Having fire sprinklers or home security alarm systems can often earn you discounts.
- Ask about other types of discounts. Some insurers offer discounts to older policyholders (age 50 or 55+), to non-smoking households, to long-term policyholders and to those with good credit ratings.
- Consider retrofitting or remodeling to disaster-proof your home. Homeowners in windstorm areas can add storm shutters, replace windows with shatter-proof glass and reinforce their roofs. Homeowners in earthquake-prone areas can bolt the house to its foundation, reinforce foundations and strap hot water tanks to the walls. Some improvements can earn lower insurance rates, but check with your insurer before making modifications.
- Raise your deductible. Remember that small claims still require handling by the insurer, which costs money. A loss of $250 is unlikely to affect your financial security, so consider raising your deductible and setting aside savings to handle smaller losses instead—and save 15 percent or more on premiums.
- Use an independent agent. An independent agent can shop around to find you the best combination of coverage, service and price for your needs. For more information, please call us.
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