If you own a home, you are probably always looking for ways to lower the cost of homeowners insurance. Unfortunately, insurance premiums are skyrocketing. Forbes Advisor found that 46% of homeowners say their homeowners insurance costs have gone up since May 2021. Keep reading to learn how you can lower the cost of your homeowners insurance.
Install home security systems.
Installing a home security system is one way to help you lower the cost of your homeowners insurance. Home security systems typically include features like burglar alarms, fire detectors, and smoke detectors. Insurance companies often offer discounts to policyholders who have home security systems installed in their homes. The discounts vary by insurer, but they can be as much as 20% off your homeowners insurance premium.
Some of the most common security features that insurers look for include a burglar alarm, deadbolt locks on all exterior doors, and smoke detectors. Installing these and other security features can make your home less likely to be targeted by burglars and may also qualify you for a discount on your premiums.
Raise your deductible.
One sure way to lower the cost of homeowners insurance is to raise your deductible. This means you will have to pay more out-of-pocket if you have a claim, but it will also lower your premium. For example, if you raise your deductible from $500 to $1,000, you could save up to 25% on your premiums.
Bundle your policies.
Bundling your policies is a great way to save money on your homeowners insurance. You can bundle your homeowners insurance with your automobile insurance, health insurance, or any other type of insurance policy. By bundling, you can get a discount on both policies.
Most insurers offer a discount for bundling policies. The amount of the discount varies from company to company, but it’s usually around 10% off each policy. Some companies offer even bigger discounts if you bundle multiple policies together.
There are a few things to keep in mind when bundling policies:
- Make sure the coverages on each policy are compatible.
- Be sure to shop around for the best deal on each policy.
- Check the terms and conditions of each policy to be sure you’re getting the best deal.
- Keep in mind that if something happens and you need to make a claim, it may be more difficult to do so if you have multiple policies with different companies.
Understand why rates are going up.
While following the tips will help you get the best possible rate, the undeniable truth is that rates are going up. One reason may be due to the increased frequency and severity of natural disasters. According to Munich Re, a global reinsurance company, there were 353 natural catastrophes in 2018, which was the costliest year on record. This caused $160 billion in losses, with insured losses accounting for over 60% of all losses. The number of events has been increasing every year since 1980, and it is projected that this trend will continue.
Insurers are also raising premiums in order to offset lower investment returns. Due to low-interest rates and stock market volatility, insurers have not been able to earn as much money from their investments as they have in previous years. As a result, they have been forced to raise premiums and make other changes such as reducing coverage or refusing new customers altogether.
In a nutshell, homeowners insurance is an important investment that can protect your home and belongings in the event of a covered loss. However, it is important to shop around to find the best rates and coverage to meet your needs. You can lower the cost of your homeowners insurance by choosing a higher deductible, bundling your coverage with other policies, and taking advantage of discounts.