How to Reduce Homeowners Insurance Premiums
Posted by Brad Butler, CIC, CPIA, CRIS, HIA on Tue, Feb 22, 2011 @ 06:30 AM
Homeowners insurance premiums often take a substantial bite out of a family’s budget. You may, however, be paying too much for this coverage. The following are some approaches you can use to reduce your homeowners insurance costs.
- If you have a new home or a renovated one, ask your agent about homeowners discounts. Many insurers offer discounts up to 25 percent for homes that are less than 5 or 10 years old since newer homes tend to experience fewer losses. In addition, homes that have substantial renovations can also qualify for this discount if the specified work has been performed by a qualified (licensed when necessary) contractor with proper documentation.
- Make your home more disaster resistant. For example, you can make your home more resistant to hurricanes and other disasters by adding storm shutters, stronger doors, and reinforced roofing materials. Many insurance companies offer premium discounts for these types of home features.
- Maintain an excellent credit rating. Insurance companies are increasingly using credit scores to determine homeowners insurance premiums. Establishing and maintaining a strong credit history can thus reduce your premiums.
- Make sure your home is not overinsured. Remember that the value of your land and the value of your home are separate. If your home is destroyed and needs to be rebuilt, the focus should be on the replacement cost of your home itself and should not include the value of your land.
Seek out other discounts. Insurance companies offer a multitude of discounts that you should check into. For example, many insurers offer loss-free discounts, long-term customer discounts, multi-policy discounts, and senior citizen discounts.
Get more personal lines insurance and risk management tips and ideas from IRMI, International Risk Management Institute, Inc.