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L o n g B r i d g e I n s u r a n c e

Few of us would consider the possibility of not having homeowner’s insurance. Like paying for health insurance or utilities, it is just one of those annoying-but-necessary expenses we simply have to put up with, whether we want to or not, or whether we ever actually use it or not.

But have you ever stopped to consider whether you might be paying too much to insure your home?

The problem with expenses like insurance is that because we accept them as a fact of life, we don’t always think about making sure we are getting the best possible rate. The truth is that homeowner insurance policies can vary a lot, and even if you shopped around when you first purchased your policy, new options or reductions may have become available in the meantime. The most important thing to remember is that it is not your insurance provider’s job to make sure you are getting the best rate. YOU must be your own best advocate when it comes to paying less for insurance. As such, it is best to be vigilant about re-checking your policy once a year to make sure you are always paying as little as possible.

Still not sure where to start? Here are 12 very smart ways to save on homeowner’s insurance that you may not have considered:

SHOP AROUND

While it is easy to get attached to a particular agent or agency, particularly one who has served your family for years, it always pays to shop around. Even if you decide to stick with your current provider, comparing prices and getting multiple quotes will give you a much clearer idea of what you could or should be paying, and will also give you more leverage for negotiating rates.

TAKE ADVANTAGE OF SPECIAL DISCOUNTS

Many insurance companies provide special discounts for a variety of factors, including age, driving record, student report cards, and more. They will not automatically apply these savings—you have to ask for them! Be sure to review an updated discount list each year to see if your family has qualified for any new discounts.

RAISE YOUR DEDUCTIBLE

One of the quickest ways to lower your insurance payment is to raise your deductible—the amount you would have to cover before your insurance kicks in. This works because the more you have to pay out of pocket in case of emergency, the less risk the insurance company has to assume. Of course the flip side is that in the event of an emergency, you would need to cover a much larger deductible, which means that this is only a good option if you are willing and able to keep an emergency fund in place. I(n a sense, your emergency fund is like your own mini insurance policy.)

ONLY INSURE THE COST TO REBUILD

Most home insurance policies will automatically cover the total value of the home, rather than the cost to rebuild. If you live in an area where the property values are higher, this means that you may be paying a premium to insure your land, when all you really should be insuring is the cost to rebuild in the event of emergency or disaster. It is important to note that changing the amount you have insured may or may not be an option depending on your mortgage company.

When my husband and I paid off our home, the first thing we did was lower the amount we insured. Our cement-block home has already come through the eye of a Category 4 hurricane and we now know from experience that even the worst disaster will almost certainly not result in more than $175,000 in damage. This is the amount we insure even though the value of our property is higher.

COMBINE POLICIES

While shopping around is important, it can also payoff big time to carry all your various insurance policies with the same carrier to take advantage of a multiple-policy discount. Furthermore, bundling policies can not only cost you less money, it can also make life easier by giving you one reliable contact (your agent) for your insurance needs and questions.

MAKE YOUR HOME MORE DISASTER RESISTANT

While prepping for a disaster won’t necessarily lower your insurance rates (though it might), it could save you from having to make an expensive claim. After Hurricane Charley we learned all about the benefits of having hurricane shutters and hurricane-resistant glass, as well as a roof and garage door that are rated to withstand 110 MPH winds. We also now have a door that opens out instead of in, which makes it far less likely to fail in the event of a storm. In other areas, smart ways to prepare might include cutting down tall trees close to the house

The best way to prepare for a disaster is before it happens. In addition to taking precautions for protecting your house, it is a smart idea to create a disaster preparedness kit and household emergency plan just in case. Check out this 20 Days to Ready series for 20 simple steps you can do to prepare for an emergency.

IMPROVE HOME SECURITY

Installing a home security system is not as difficult or expensive as it might sound, and many insurance companies will offer a significant discount for homes with a home security system. Adding additional locks, motion sensor lights, and other home security features can help as well. Check with your provider for specific details.

MAINTAIN A GOOD CREDIT SCORE

While this is not always the case, your credit score can have a big impact on your insurance rates. Some insurance companies will consider anyone with poor credit “high risk,” which will ultimately result in a higher rate. While not all insurance companies use credit as a gauge, it is definitely a smart practice to use credit wisely in any case in order to avoid potential red flags. Of course my personal preference is to avoid credit altogether!

ASK FOR A LONG TERM DISCOUNT

While it is not necessarily a good idea to stick with the same old insurance carrier you’ve always had, there might be a way to make that loyalty work in your favor. If you have been with the same insurance company for more than five years, be sure to ask about long-term discounts, which are rate reductions based on the number of years you have been insured through a particular company. Again, these discounts won’t happen automatically, so you do still have to be vigilant, but it never hurts to ask!

SWITCH TO PRIVATE INSURANCE

If you live in a high-risk areas that has been susceptible to flooding, hurricanes, or other natural disasters, you may have been told that your government insurance is your only option. However, this may not be the case! Be sure to check with a local insurance provider to see if there is a private insurance option available at a less expensive rate. You may be surprised at what you find.

BUY A CHEAPER HOUSE

While it might not be practical to move just to save on home insurance, the house you live in does have a huge impact on your insurance rates. It goes without saying that the more expensive your home, the more expensive your insurance will be. If you are in the market for a new house, consider downsizing to a smaller house or cheaper location. Also look for features to your new house that will help keep rates down, such as added security or features that make it more disaster-resistant.

COMPARE INSURANCE RATES BY NEIGHBORHOOD

All neighborhoods were not created equal when it comes to homeowner’s insurance. Proximity to the ocean, elevation, flood risk, and any other claims common to your neighborhood all play a factor, and, according to the Allstate policy expert that we spoke with, things like how close you are to a fire hydrant and fire station, environmental issues, theft and more are also considered.

This means that even just a few blocks can make a huge difference in what you will pay for your policy. If you are shopping for a new home, be sure to consider location in your decision, and to find out what your insurance rate would likely be before you make an offer. (Allstate has a tool you can use called Common & Costly Claims that helps identify the most common and costly claims in your zip code.) The “perfect” house might not be as good a deal as you think!

The common theme running through all these ideas is that YOU as a homeowner must be vigilant about making sure you are always getting the best insurance rates. Your insurance agent will not do this for you! Set a date on your calendar to review your policy using the ideas on this list, then make sure to repeat the process annually. You just be pleasantly surprised at how much you are able to save!

That said, if you find it difficult to advocate for yourself, you may want to consider a service. This innovative service helps negotiate better rates for all your bills, and then splits the difference with you, which means that they only get paid if they are saving you money.

Long Bridge Insurance Agency here to get you the best coverage and best price.

We make sure you protect your most valuable asset.

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