As a new homeowner, it may seem like the expenses never stop. First there’s the down payment and closing fees, then your mortgage statements start rolling in—and don’t forget homeowners insurance!
While it may seem like another expense, homeowners insurance is pretty important. It offers financial protection if your home or its contents are damaged or destroyed, and it also protects you in the event that you or a family member are held legally responsible for injuries to others or damage to their property. It can even cover damage caused by some household pets, if that’s ever an issue.
Although most mortgage lenders require homeowners insurance, you shouldn’t have to break the bank to pay for it. But if you’re not careful, you could wind up paying more than you should to insure your home and its contents.
Fortunately, we’re here to help. Here are five simple ways you can save big on your home insurance:
1. Shop Around
A U.S. consumer financial services company recently conducted a survey of home insurance costs from four companies. The survey, based on addresses in 15 cities nationwide, revealed home insurance rates ranged by as much as 188 percent depending on the location.
Homeowners insurance is readily available from dozens of providers, and those who shop around can compare and contrast rates until they find the best price.
Consumer guides, insurance agents and online insurance quote services can help you discover the lowest rates. In addition, the National Association of Insurance Commissioners (NAIC) provides comprehensive information about the insurers in your state, including customer reviews and complaints.
2. Double Up on Auto and Home Insurance
Did you know you may be able to save money if you obtain your auto and home insurance from the same company? That’s right—some insurance providers offer discounts that commonly range between 5 percent and 15 percent off your premium if you purchase multiple policies from them.
However, do your homework before you select multiple types of insurance from a single provider. In some cases, it may in fact be more affordable to buy home insurance from one provider and auto insurance from another.
3. Secure Your Home
Capitalize on home security discounts by adding deadbolt locks or a burglar alarm. This could lower your home insurance premium by up to 20 percent. Plus, you’ll be able to better secure your residence and its contents. Remember, a savvy homeowner understands the short- and long-term ramifications of improving home security. Bolstering a residence’s security requires upfront costs, and a homeowner who does his or her homework will ensure a short-term home security investment delivers long-lasting insurance savings.
4. Maintain Good Credit
Do you know your credit score? If not, you could be missing out on opportunities to improve this score, and ultimately save money on your home insurance. Studies have found that people with poor credit may pay at least twice as much as people with excellent credit when it comes to homeowners insurance.
There are many simple ways to improve your credit score, including paying your bills on time and keeping low balances on your credit cards. Those who devote the necessary time and resources to learning about this score and work toward improving it can protect their credit standing.
5. Stick With Your Insurer
Staying with one insurance company may allow you to reduce your home insurance costs over an extended period of time. Some insurance companies offer special discounts for long-term policyholders. In fact, you may be able to lower your home insurance premium by up to 10 percent if you stay with certain providers for six years or more.
Homeowners insurance is an inevitable part of property ownership, but it doesn’t have to be a financial burden. Use these tips to reduce your home insurance costs, and you can reinvest that money you’ve saved back into your new home.