Here at CoVerica, we are often asked about ways to save money on Homeowners Insurance. We know that not everyone gets excited about buying Homeowners Insurance, but we think that with a little bit of awareness, everyone can get the best coverage for their insurance dollar. We’ve been helping clients shop their insurance since ALF was on TV, (we’re not kidding about this) so we know that everyone doesn’t want to throwaway money when buying insurance. Here are a few basic things to get you started:
Good Credit Is a Big Deal
One of the biggest influences for insurance companies determining prices on homeowners insurance premium is your credit score. As you might guess, the better your credit score, the lower your price will be. The reasoning behind this, is insurance companies have determined that those insured who value their credit score, are less likely to take risks or need to file a claim. Once your FICO score is above 750 or approaching 800, you could be in the highest discount group for home insurance.
Shop Around For Homeowners Insurance
The next thing I’d recommend to someone looking for Homeowner’s Insurance is to shop around with an independent agent like CoVerica. No single carrier is best for everyone and each insurance carrier has a different appetite of what their ideal client should look like. Captive agents, such as State Farm, GEICO, Allstate, or Farmers are only able to shop for insurance for that one particular brand whereas an independent agent can shop from nearly dozens of insurance companies simultaneously. With that said, each insurance company has a target customer profile, house type, construction, age, safety features, and location in which they’ll be more competitive. We’ve seen home insurance rates vary from company to company anywhere from 6% to over 200% for the exact same risk.
Raise your Deductible Homeowners Insurance
It’s also a good idea, if you want to save money in the long run, to raise your deductible. For example, let’s just say your deductible is $500 and your house gets broken into and $1,200 worth of valuables are stolen. If you file a claim, you will receive $700 ($1,200 in damages – $500 deductible = $700). However, the cost of your insurance is likely to go up and the claim will stay on your insurance history for anywhere from three to five years. At times, you may want to not file a claim with an insurance company if it is at or near your deductible limit. A general rule of thumb, we have typically advocate filling a claim when the damages would cause significant hardship to you or your family. As an example, I would likely fill a claim for a hailstorm since my roof replacement would cost nearly $15,000 dollars but I would not file a claim had my son broke a window with his baseball. We typically like to ask clients and potential clients, how much risk are they willing to bear in the event of a loss. The more risk-tolerant a client is, the higher we advise setting your deductible.
While underinsuring your home is a sure fire way to save money in the short term, come time to file a claim, this can be financially devastating. To put this into perspective, if you were to file a claim for your roof and your home is underinsured by 40%, the insurance company will deduct the percentage underinsured from the claim payment leaving you paying thousands of dollars out of your own pocket.
It’s critical to dial in an accurate insured value for your home. At CoVerica, we use industry-leading tools to estimate the actual insured value for your home. There are times, when other agents and companies do not have access to these tools and simply take a guess at what value you should insure your home. This is an area where you want this insured value number to be as accurate as possible and not egregiously over estimated.
Be Careful When Bundling Your Home and Auto
There are many advantages to bundling your home and auto insurance. In some cases, you can save anywhere from 5-15% by having both policies with the same carrier. Insurance companies also offer discounts for loyal clients who’ve used the same company for both their home and auto insurance. However, there are also cases where you can save more than 15% by having the policies with separate insurance companies. This is why it’s best to hire an independent agent to search for the best combination of policies that fit your specific needs and maximize any available discounts. An example of this, is we recently saved a client over $800.00 a year by moving his auto away from his homeowners insurance company. The reasoning for this was the company that had the best value for his homeowner insurance was not an auto insurance company that rated well for having a youthful driver. We found a insurance company that was more favorable on his auto which made up the difference for the bundling discount on the home. This is something that your CoVerica agent can walk you through when those options present themselves.
Upgrades, Improvements and Security
While this might be obvious to some, it’s good to know that homeowners can receive discounts for having additional safety features on their homes such as deadbolts, smoke detectors, monitored burglar alarms, fire extinguishers, fire alarms, recent updates on roofs, plumbing, heating systems and/or electrical, fire resistant building materials, storm resistant roofing, storm shutters and a smoke-free home.
One last word of advice about home insurance is to not let your house insurance expire. A lapse in coverage is a huge red flag to insurance companies as the client that let their insurance lapse may appear more risky or lackadaisical about their financial matters. Having a lapse in coverage can cause your rates to spike for many years to follow.
CoVerica is focused on finding the best homeowners insurance policy that caters each of our clients specific situations. We want the best for our clients and that means finding the perfect combination of insurance plans that not only saves you money, but put your mind at ease that you are properly covered in case of a disaster. If we can help you shop for homeowners insurance online at anytime or you have questions on how to save money, please feel free to reach out and we’ll be happy to provide you with a quote.