5 Ways to Lower Your Homeowners Insurance Premium

by Travis Etheridge

Homeowner’s insurance is important to have if you own your home. This type of insurance offers protection against certain losses and damages to an individual’s home and assets in the home. Many homeowners purchase their policies, and don’t always look into ways of lowering their insurance premiums.

Like any other insurance purchase, you want to make sure that you are purchasing all the coverage required by law, and the coverage needed based on certain financial situations. Like liability coverage, which offers protection against accidents that happen inside the home and/or on the premises.

But homeowner’s insurance coverage doesn’t have to be expensive; the highest coverage isn’t always needed. Too much coverage leads to high premiums and too little coverage can lead to a financial crisis. Here are some things to consider before anything else:

Where you live must also be considered.
Are there hurricanes or earthquakes?
Are you in a flood zone?

Factors Considered in the Cost of Homeowners Insurance

When an insurance agent/ insurance carrier is submitting information for a quote, the following is considered:

Credit
Security
Area crime rate
Replace the cost of the home
Age of the home
Size of the home
Area history regarding claims
Personal claim history for policy owner(s)
Pets
Number of people that live in the home
Construction type
Roof type

Ways to Lower the Cost of a Homeowners Insurance Premium

Go with a higher deductible. This is your out of pocket contribution to a claim. If a deductible of $500 is chosen, your out of pocket expense toward the cost of the claim is $500, and your insurance company pays the rest. With a higher deductible like $1000, you do risk having a higher out of pocket contribution, but you also save on your premium each year.
Combine your policies by having all of your policies with one insurer. Consider combining your home and auto policies for a savings of about 10%. Most insurance companies offer “multi-policy discounts” and this can lead to pretty large savings.
Review your personal property coverage. A homeowner’s policy will include protection for personal property. These amounts can be adjusted. Is the home as furnished as it was when the homeowner’s policy was first purchase? Is the same jewelry in the home? The amount of personal property coverage should reflect the amount of personal property that needs protection.
Don’t include the value of the land. A homeowner’s insurance policy doesn’t provide coverage for the land that the property sits on. If included, the premium will be expensive. An agent can run a replacement cost estimate to give an idea of what the costs will be to rebuild the home if destroyed.
Check for inflation adjustments that every home policy includes. Insurers automatically increase the dwelling limit each year. This happens to keep up with the rising costs of rebuilding homes and to make sure that your insurance coverage will completely rebuild homes. Insurance agents can run a replacement cost estimate to see if that amount can be lowered still being protected.