Tip 1: Let an Independent Insurance Agent Shop for Your Home Insurance
This is often the most effective way to save money on your home insurance. The consumer must take great care because, truly, not all homeowners policies are created equal. Depending on the company, policy features and coverage amounts, it is quite easy to end up with a policy that is not at all comparable to what you have. You may be losing valuable coverages (like Building Ordinance Coverage) that could make the difference in your home getting rebuilt quickly or not at all! By far the best way to shop for insurance is to let an Independent Agent do the shopping for you. They represent many companies with many different policies so they will be able to custom tailor a policy to fit your needs. Companies that sell directly (or through agents that represent only the one company) simply can’t do that. Plus the Independent Agent is more likely to be able to offer you a lower rate on your home insurance since they shop with many different companies and most likely use companies that have good rates in your area.
Tip 2: Carry Higher Deductibles
Are you one of those people who have carried home insurance for years and years yet have never filed a claim? If you are someone who rarely file claims, it makes sense to consider a high deductible of $2,500 or $5,000. Often, carrying a higher deductible can save you 30%-60% in home insurance costs every year. It doesn’t take long before you have saved the difference in deductible within just a few years of not filing a claim. Obviously, the down side is that if you do file a claim, you will pay more towards the claim.
Tip 3: Bundle Up Your Auto Insurance and Home Insurance
Call it packaging, bundling or whatever. Keeping your auto and home insurance with the same agent can save you hundreds of dollars on your home policy. As I mentioned in my article on auto insurance savings, this doesn’t necessarily mean they have to be with the same company. Carriers that don’t write auto insurance (or even some that do) will often give you the discount if you use the same agent for both your auto insurance and home insurance.
Tip 4: Look to Eliminate Coverages You Don’t Need
Some companies will let you eliminate coverage for some things you don’t need in exchange for a discount. A good example is the ability to remove Dog Liability from a Mercury Insurance home policy. If you don’t own a dog and never dog-sit for a friend or relative, you can lop 10% off of your policy by excluding that coverage. Be careful though, we strongly advise against this if you do own a dog but just feel that YOUR dog will never hurt someone. Someone accidentally stepping on its tail causing them to reflexively turn and bite, an enthusiastic puppy knocking over a small child or someone simply tripping over your dog could all give rise to a claim that could be catastrophic if you don’t have dog liability coverage on your home insurance.
Tip 5: Beware of Bare Bones Policies
There are some companies that are selling ‘bare bones’ home insurance policies although the agent selling you the policy does not detail what coverages are not on the policy. One of the barest of policies is through a company called Topa which is often sold because its policy can be really inexpensive. It’s inexpensive, however, because it dramatically limits what is covered. Often bare bones policies have no or very limited coverage for water damage, by far the most common of homeowners claims. Also, they might not even provide coverage for theft at all! Companies like The Hartford, however, might offer many more features and benefits and yet be very competitively priced. Even companies like State Farm offer a stripped down policy that looks good at first glance but when the limitations and exclusions are examined closely, it is far less attractive than a full-featured policy that often costs less. A bargain-basement policy is no bargain if it doesn’t pay your claim!
Look for our companion piece: Tips to Save Money on Car Insurance. in the mean time we hope you found this information helpful and can use these tips to save money on your auto insurance.