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How to save money on home insurance

June 15, 2016
Get more value for your peace of mind by comparing home insurance rates.

One necessary expense that some home buyers neglect to accurately budget for is homeowners insurance. Although it's easy to take it for granted, finding an affordable homeowners insurance policy could end up saving hundreds of dollars per year. Still, like any insurance policy, the real money-saving potential is often hidden from plain view.

Rewarding research

"Aim to get at least three quotes before making a decision.”

The first step to saving money on just about any purchase is to know what you're getting yourself into in the first place. The same applies for homeowners insurance, but to an even greater extent. According to the Insurance Information Institute, the difference between two very similar policies could vary as much as a few hundred dollars. This is why it pays—and pays well—to shop around before pulling the trigger.

Luckily there are many tools available that let you compare homeowners insurance. The III suggested getting at least three quotes from different providers before making your decision. This can usually be done with just a phone call, although many agencies now offer quotes online as well. Some state insurance departments may also offer information on homeowners insurance rates. Once you have your ideal quote from an insurer, you can even do further research on them via an independent rating agency like Moody's or A.M. Best. These organizations will ensure that the company has a good reputation for quality service.

Getting claims paid

After you've found the ideal homeowners insurance policy, you might be ready to sit back and reward yourself for a job well done. Don't dawdle too long, though, because your work as a homeowner and insurance plan member is just beginning.

Homeowners insurance is essential because of the protection it offers when your home is damaged, which can happen for any number of reasons. Severe weather is one of the most common reasons homeowners file an insurance claim. Unfortunately, this minor disasters can happen at almost any time, so it pays to be prepared as much as possible.

"Prevention is the name of the game when it comes to saving on claims.”

The best way to save money on insurance claims is to do your best to prevent them from ever happening. Consumer Reports noted that damage from falling trees is one of the most common reasons for insurance claims, and these events are typically only covered up to $1,000 for repairs and removal. A small preemptive investment in tree care—and removal, if needed—could pay off in the long run, compared to the out-of-pocket costs from uninsured damage. That's not to mention the higher premiums you may have to pay after filing a claim.

Know your credits

Unbeknownst to many homeowners, some of the best savings to be had on insurance come after the policy is purchased. Bankrate detailed many of the most common homeowners insurance credits in an article, which could come in handy for budget-conscious households:

  • Preventive fixes:  Some insurance providers will provide discounts for certain renovations that make the home safer, like impact-resistant shingles on the roof or an update to the electrical wiring.
  • Location-based:  Many homeowners will find their insurance rates vary depending on where they live. Gated communities and those with homeowners associations tend to enjoy lower premiums, according to Bankrate.
  • Age and health:  Contrary to most health insurance plans, retired homeowners may receive a credit on homeowners insurance, since they tend to file less claims. Bankrate found that non-smokers could also save up to 15 percent on their home insurance.

With this advice in mind, you're more ready than ever to save plenty on your new homeowners insurance policy.