How to Lower Home Insurance Costs-Ninja Tricks Part I
Posted by Chester Butler, CIC, CPIA on Thu, Dec 08, 2011 @ 06:00 AM
A couple of months ago I predicted Tennessee homeowners insurance rate increases in 2012. The Tennessean published my predictions. Now those predictions are becoming reality. I gave you the disturbing facts in my last blog. 
If you are a Tennessee homeowner insurance buyer, a dramatic premium increase is likely in 2012. Here are tips on how to lower home insurance costs or at least offset some the increases coming your way:
- Consolidate your all personal policies with one insurance company. I cannot stress how important it is to have your auto, home, and personal umbrella policies with the same insurance company. By having all your policies with the same company you will get a discount on your homeowners and your other policies, too. In many cases, this results in multiple discounts which reduce the total amount of the annual premiums by 25%. That is a chunk of change for most families
- Pay your auto policy premiums in full. Most insurance companies offer a paid in full discount on auto insurance. This maneuver will not directly lower your homeowners premium but it will lower your annual insurance costs. Spending less in insurance premiums is the goal, right? Now, I am going to go out on a limb. Pay your auto premium in full even if you have to put it on a credit card. Get the discount and pay off the credit card in a month or two and you are ahead. And you can tell Dave Ramsey I said so! I like old Dave but like most of us, “you ain’t right all the time, Dave.”
- Get another discount by placing your rental policies with the company that writes your home insurance. Most people do not realize that some companies give account discounts if they write your rental property. Why? Because those companies have figured out that if they have 5 or more policies for you, you are more than just a customer. You are a client. And it costs less to keep you happy and retain your business than it does to find a new customer. Of course, it took 20 years and a recession for some them to catch on. If you have rental property bag that extra discount!
- Raise your deductibles. In the early 1970’s a home might cost $20,000, so a $250 or $500 deductible was reasonable. Now a home costs much more and your deductible should be much more. I recommend $1,500. You get a discount for a higher deductible. But that is really not the goal. The goal is to protect your “loss free discount”. A higher deductible removes the temptation to turn in a small claim and then you lose the loss free discount. Your loss free discount and the higher deductible discount will save you some bucks. Keep this in mind; the average homeowner makes a claim once every 8 years. If your homeowners claim activity is more that, your insurance company may ding you with higher rates.
In my next blog I will be sharing more Ninja tips to help you keep your homeowners cost in line. In the meantime, if you need help with a personal insurance issue just give Stefanie a call at 690-8859 or drop her an email at Stefanie@insurancebutler.com.