Now, for those of you that actually do want to save some coin on their home insurance costs let us show you the fastest and easiest paths to savings. It's not hard, but there are some things to consider.
1. Shop your coverage.
- Study after study shows that shopping your coverage for home and auto every three to five years can take a massive chunk off the premium if you have a good history.
- If you're prone to claim, finding carriers that can overlook some blemishes on the record can make a huge difference.
- Yes, we're a bit biased, BUT an independent insurance agent can look across many markets rather than having a single tool in the box. That means you can know your cost options and move accordingly.
2. Do I really need that low of a deductible?
- Low deductibles do a couple of things.
- They transfer most of the risk to the insurance company. You have no skin in the game.
- They encourage higher utilization (read claim activity) by the consumer.
- Both of those are bad. Here's why.
- When the company assumes more risk, they will charge more. Seems simple enough.
- More claims = Companies pay out more money. Where do you think it comes from?
- In the end, if you save your claims for only BIGGER stuff you will save more money on your premiums.
- You won't be surcharged for claims.
- You will have control over the maintenance and repairs of your house.
- It makes both you and the company happier.
3. Impact Resistant Shingles
This one is a touchy subject. Impact resistant shingles can be expensive. And when a grapefruit sized piece of hail hits it, it won't matter. HOWEVER, they do offer greater protection against small stuff. And in the end, that's what matters the most where premiums are concerned. Let's look at some math.
If your impact resistant roof costs you an extra $2,000 to install, you will think I'm crazy! BUT! What if the roof you install reduces your premium by $500 to $700 per year? At that point, if we haven't made a claim by year four we are seeing a positive cash flow return on that investment.
What if I install a metal roof? Metal roofs are great. They are absolutely awesome with respect to your insurance premium. However, they are generally incredibly expensive to install and are not replaced simply for cosmetic damage. So the math can become fuzzy in recovering that cost.
One key to this plan is to work with an agent who represents companies that provide sizable discounts for the roof type and age. Also make sure you keep documentation of said shingle to prove it to the company so that we can save you money!
4. Renovations that update critical systems
If your home is brand new skip this recommendation. :-)
- Ok. So your home is hitting that magic 15 to 20 year mark. So what? Yeah, that's when things start going haywire.
- Or maybe your home is 40 or 50 years old? Creaking homes are not always great!
- Older homes are more expensive to insure because stuff breaks down. And that often results in claims!
- So what do you do?
- Have a trusted and licensed contractor inspect your four main systems to see what might need to be updated.
- Electrical breaker box
- Heating systems.
- Many of them can be fixed up for smaller amounts of money.
- After the inspection and/or updates, you are ready to show the companies that you're a great risk and deserve those lower rates.
5. Multi-Policy Discounts
I know, I know. You've heard the bundle story before. But it's true. Companies that offer both home and auto insurance will generally incentivize you to let them take on the package. Some companies, it can be as much as 30% discount on a single piece simply because you gave them both. Use this to your advantage.
One caveat to this one. Independent agents, like Insurance For Texans, can often work with companies that will give you a discount on the home if they also insure your car. Even if the auto is with a different company than the home. Neat, huh? Just one more reason to leverage an business that works for you rather than someone else.