Six Ways to Lower your Home Insurance Bill

1 – Don’t Settle with Your Current Rate

Even if you already have homeowner’s insurance, there’s nothing that says you have to stay with your current plan. In fact, you could potentially save by making a few simple phone calls and transferring your policy to another, more cost-effective company.

This method is often the most successful money-saving tool because various companies are competing for your business (just like banks do with mortgages). As a result, they’ll likely be willing to negotiate a lower rate to beat the competition.

Doing research on different Insurance Carriers and figuring out the details will save you money, every month, and every year. It doesn’t take a lot of time – you just need to know what to ask as you compare prices and coverage.

2 –Multiple Insurance Carriers

If you have different Insurance Companies for your home, auto, boat, RV, summer home, motorcycle, etc. ask each one of them if you switch to their company for everything will you get a discount. In most cases you will get a substantial savings if you have one company covering everything.

Note: Buying your policies from the same agent is usually a good idea, but automatically buying them from the same company can be a bad idea if you want an “Umbrella Policy” (type of Insurance that provides liability coverage over and beyond your automobile or homeowner insurance).

More on Umbrella Policies another time

3 – Install a Home Security System

Taking precautions to make sure you won’t have to file a claim also ranks high on the list of how you can effectively lower your monthly payments.

Insurance companies are encouraging homeowners to install monitored security systems by offering them substantial discounts on homeowner’s insurance.

4 – Increase Your Deductible

When you file a claim to your insurance company, the deductible is the amount of money you have to pay out-of-pocket before your insurance kicks in.

And it turns out that by raising your deductible, the insurance company assumes you’re less likely to submit a nuisance claim for something small, such as a maintenance claim. And if you’re less likely to file claim, your insurance company will typically reward you with a lower premium.

For this reason, the Insurance Information Institute’s (III) website says raising your deductible is a viable way for homeowners to reduce insurance costs.

The higher your deductible, the more money you save on your premium, consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25 percent.

5 – Review the Claims History for Your Property

A C.L.U.E. report, short for Comprehensive Loss Underwriting Exchange, reveals any and all claims on your home, including the details of the event and how much was paid out. This report is similar to a Credit Report but it’s for the Insurance Industry.

C.L.U.E. reports are generated by LexisNexis, a consumer reporting agency that provides customers with access to documents and records. An insurance company may request this report when you apply for a coverage plan to determine how much you should pay.

Knowing what’s listed in a C.L.U.E. can possibly end up saving you money in the long run. If you already own a home, you should still request a C.L.U.E. report to ensure there isn’t any erroneous information that could be affecting your monthly payments.

I’ll have more on C.L.U.E. and LexisNexis at a later date.

6 – Assess the Value of the Possessions in Your Home (Asset Management)

Do you know how much everything in your home is worth? Would you be able to remember everything you own if you have to file a claim after a loss?

If not, you may want to start assessing the value of your possessions, because it could help you save money on your homeowner’s insurance,

Knowing this information will allow you to have a more balanced discussion with your agent on understanding the proper amount of coverage based on the actual contents of your home, versus an estimate or guess.

Many homeowner policies have a coverage amount to replace the physical structure, and then a percent of that number is an amount for your personal contents.

If a homeowner does not have a home inventory, they really don’t know the value of their contents, and therefore they can’t compare it to what the policy is covering.

Understanding the value of your possessions is crucial because if the total value is less than what is covered, you could ask about lowering your policy fee.

On the other hand, if your possessions are worth more than what’s covered, or if you have one-of-a-kind artwork that’s not covered by the standard policy, you’ll need to specify these items in a home inventory and insure those separately through a “rider.”