Daily Dose of Thrifty: 12 Ways To Cut Your Homeowner’s Insurance Premiums

Homeowners Insurance is a very valuable and very needed expense.  It is not something you should cut out of your budget (and if you owe money on a home, your lender will require it!).  So even though this expense is necessary, there are a few tips that we have discovered to help you reduce the cost of your insurance premiums.

Check your policy and talk with your insurance provider to make sure you are maximizing all the discounts on that bill! Just a few quick changes can yield quite an annual savings!

Here are 12 Ways to Cut Homeowner’s Insurance:

• Increase deductible – You buy insurance to be protected in case of the “unexpected.”  But it really is unexpected and many go their entire life without needing to make any insurance claims. So, we recommend increasing your deductible so that your monthly premium will be reduced.
• Ask if there are discounts for having safety measures in place like alarm systems – If your home has certain safety measures in place, you may be in for a discount. The most common is an alarm or security system.
• Only insure rebuilding costs, not the cost of the land – If the unexpected were to happen, it is most likely going to happen to only your home and the claim you would be making would be the cost to rebuild your home – not the land! The land your home sits on is generally included in the total value of your home (like the price if you were to sell it!), but you will be able to “reuse” the land and so there is no since in insuring the land, just the cost to rebuild the home that sits on that land.
• Ask if there is a discount for professionals – This one was new to us this year. We recently re-evaluated our policy and discovered that we could receive an additional discount for being a professional (by day, I am a Software Engineer).  You will need to prove your professional status, generally with college transcripts, degree, or professional certificate.  Also, a professional is going to be defined differently for each insurance company.
• Ask if there is a discount for marital status – If you are married, you may be able to get additional discounts.
• Ask if there is a good credit discount – If you have decent/good credit, this may also give you an additional discount!
• Ask if there is a  “someone home all day” discount – This is a common discount among many insurance providers, but if there is someone at home all day, like a stay-at-home parent, a retired person or other, then that is a safety precaution as it lessens the risk for theft and other home damaging factors.
• Ask if there is a discount when you pay your policy for 6 months to 1 year at a time – This is another common discount among insurance providers. Many will give you a dollar amount discount or percentage off discount by paying your premiums for a full 6 months or even 1 year.
• Check with employer to see if they have a group discount for homeowner’s insurance – Many companies will have provided a group purchasing discount through that employer – you can think of it like a co-op.  Some larger companies will offer this discount as an “added benefit” to working for their company by allowing employees to buy into the group plan.
• Combine policies with one company – Another common discount is the multiple policy discount.  Many insurance providers will give you discounts if you also purchase your car insurance, life insurance, etc. with your homeowner’s policy.
• Review your policy at least once a year with your insurance agent – We try to do this once a year, and as I just mentioned, we discovered the professionals discount this year.  Sit down with or have your agent review your policy to see if there are any changes that can be made or new discounts obtained, etc.
• Regularly compare company policies – By comparing insurance company policies, you can potentially find a much better deal elsewhere for the same coverage. It is worth comparing every once in a while just to be sure that you are with the best provider.

You really can find discounts on those “necessary” evils – I mean expenses.  Please share with us any tips that you might have in getting a bit of your money back from purchasing home insurance.

Disclaimer:  We are not licensed insurance agents.  As such, please do not consider this as professional advice, but please always solicit and work with a certified insurance agent prior to implementing any of the ideas presented in this post.