Whilst the value of the average American home may not have changed much in recent months, the cost of protecting that home certainly has. Home insurance premiums have noticeably 'bumped' up of late, and now homeowners are left wondering if there's anything they can do to mitigate this.
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The good news is, there's actually several courses of action homeowners can take to reduce their insurance premiums. The following tips from Money Magazine are worth their weight in gold:
Shop for Discounts
The first thing to do, should your premiums rise by more than 5% when your policy comes up for renewal, is to call the company and ask exactly why they have increased. It's important from your negotiating position to know whether or not the premium increase is due to broad, marketplace increases, or if your own risk profile has changed. Knowing this, homeowners will be in a better negotiating position, whilst they will also be in a better position to compare prices, which should of course be done they renew anyway.
As well as shopping around, don't forget to look into the possibility of discounts. Buying insurance policies from the same provider will often be rewarded with a reduced rate ' possibly as much as 15% if you were to buy, say auto insurance and homeowners insurance from the same company.
Upgrade your Home
Numerous upgrades to your home can lead to savings on homeowners insurance. For example, adding a new roof will reduce the possibility of storm damage and should result in discounted premiums. Or else, fitting burglar alarms to every door and window will almost certainly be looked kindly upon by insurers, given that such an installment will significantly reduce your chances of being burgled. Other things such as new locks, fire alarms and storm shutters will all have the same effect.
Assess the Deductible
It used to be that homeowners were advised to take the highest deductible they can afford, as this would lead to reduced premiums. However, these days many insurance companies are recalculating deductibles to percentages, rather than using set amounts as they did before. Hence, this can lead to a substantial change.
Base Coverage on Replacement Costs
Many homeowners make the mistake of basing their coverage on their home's appraised value, which can often lead to them taking out more than they need. It's possible to obtain information regarding the average square-foot-per-replacement costs from your local home builders association, which is a far more accurate gauge for your own costs.
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