Most home buyers understand that one significant aspect of buying their dream home is figuring out how to keep costs down. Options range from negotiating the sale price to shopping around to pay less than the average real estate commission to deciding whether a real estate lawyer or a realtor offers better value for your transaction.
But what’s less well-known is that this process continues even after you become a homeowner. While your mortgage payments are often fixed, costs like home maintenance, property taxes, and especially home insurance tend to creep up over time. And unfortunately, that’s true everywhere, not just in states with high-profile crises such as Florida and California. Luckily, there are some pretty straightforward ways to bring down your home insurance costs.
Shop and Re-shop
When you initially decided on a home insurance provider, you probably did a comprehensive comparison process to find the policy with the best value or cost.
But don’t make the mistake of getting complacent. You should check out the insurance marketplace every year to ensure you’re still getting the best rate. This is especially important if there’s been an extreme weather event in your area, as different companies may adjust their post-disaster rates by dramatically different amounts.
Keep in mind that some insurance providers offer loyalty discounts for customers who’ve stayed with them for a certain number of years. So, before you jump ship for a cheaper premium, touch base with your agent to see if you qualify for a discount.
Make Sure You Have the Right Amount of Coverage
Your home insurance should cover a complete rebuild of your home should the worst happen. This is why it’s even more vital to take advantage of the most accurate home value websites, which will give you a good sense of how much your home is worth.
However, that number isn’t necessarily the value you should have insured. Your home’s total value also includes the value of the land, which won’t be affected even if your home is destroyed by a hurricane or wildfire. Make sure you’re getting insurance to cover the actual rebuild value of the structure, minus the land.
Raise Your Deductible
Your deductible is the amount you’ll have to cover out of pocket before your insurance kicks in. In general, the lower your deductible, the higher your premiums.
However, raising the deductible on your home insurance can be a good option if you’re willing and able to pay cash out of pocket. Doing so can significantly lower your monthly premiums; just make sure you’re comfortable taking on that higher risk.
Maintain Pristine Credit
Your credit score is a major factor that insurers consider when they set your rates. Clean up your credit before buying home insurance just as you did when shopping for a mortgage, and, just as importantly, keep your credit clean. Insurers check your credit score periodically and will increase your premiums if your score has declined.
Consider Your Roof
Insurers give your roof a close look, especially if you live in a disaster-prone area. Older roofs are often subject to higher insurance rates or surcharges and may lead to a loss of coverage in some situations. Talk to your insurer about their specific rules around roofs, and make sure you’re doing what you can to minimize your roof-related insurance costs.
When you decide to replace or upgrade your roof, ask your agent if you could qualify for a discount if you opt for a specific type of roof. In many disaster-prone areas, putting on certain types of damage-resistant roofing can get you a big discount on your home insurance. This type of roof can be more expensive, so crunch the numbers to make sure your long-term premium savings are worth the extra expense.
Strategically Upgrade Your Home
This principle applies to the rest of your home, too. The more damage-resistant you make your home, the lower your home insurance will often be since you’ve reduced your risk.
Insurers often readily give you discounts if you upgrade old plumbing or electrical systems or install protective measures like gas and water leak or smoke detectors. If you’re in a fire-prone area, you can sometimes get a nice discount if you opt for fire-resistant landscaping or remove brush or trees.
You should also make sure you’re not making home improvements that might raise your insurance rates. While generational home improvement insights might suggest that a swimming pool is an easy way to increase your home value, there’s another side to the argument. Home features like swimming pools, trampolines, and even certain types of pets can raise your home’s risk profile in the eyes of your insurer and result in higher insurance premiums.
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