Strategies to Reduce Homeowners Insurance Premiums

The last three years have not been kind to U. S. homeowners renewing their homeowners insurance policies.

As noted in a Wall Street Journal article, “For many Americans, getting insurance has gone from a routine, generally manageable expense to a do-or-die ordeal that can strain household budgets” amid sharply rising premiums and fewer choices of insurers. Another WSJ article said home insurers are using drones to check the life expectancy of roofs and spot yard debris and undeclared pools.

 

There is a “perfect storm” of reasons for premium hikes including an increased cost of building materials and labor, fraudulent claims, fewer insurance companies writing policies, and climate change effects (e.g., wildfires, coastal flooding, hurricanes, and tornadoes) resulting in increased claims payouts.

 

What to do? Below are nine strategies that may save money on homeowners insurance without sacrificing robust protection for your home:

 

Obtain Multiple Quotes- Get quotes from at least three different insurance companies using online comparison tools to facilitate this process.

 

Use an Independent Agent- Consider working with an independent insurance agent who can provide quotes from various insurers to help identify the best deal.

 

Do an Annual Review- Reassess your insurance needs and compare rates annually to ensure that you are still being charged a fair premium.

 

Consider a Higher Deductible- Ask your insurance agent to provide premium quotes for different deductible amounts and “do the math” to decide if a higher deductible makes sense.

 

Bundle Your Property Insurance- Ask about available discounts if you bundle your homeowners insurance with other insurance such as auto, umbrella, and life insurance.

 

Install an Impact-Resistant Roof- Make your home less of a risk for an insurance company. Insurers look favorably on homes with new, impact-resistant, and well-maintained roofs.

 

Take Advantage of Discounts- Inquire about discounts for bundling, loyalty (i.e., long-term customers), age (e.g., age 55 or 60+), and a claims-free record. It never hurts to ask.

 

Pay Premiums Less Frequently- Find out how much paying your premium annually or semi-annually will save versus making more frequent payments (e.g., monthly or quarterly).

 

Maintain Your Home- Keep your HVAC, plumbing, and electrical systems in good working order to reduce the risk of fire or water damage. In some areas (e.g.,  parts of Florida) with intense heat, humidity, and storms, insurance companies are starting to require 4-point inspections (HVAC, electrical, plumbing, and roof) to better assess the risk of insuring a home.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.