Nobody wants to pay more than they have to for homeowners insurance. But some low-cost insurance options “save” you money by leaving out important protections. In the event of a claim, these policies end up costing you far more time, money, frustration – or all three.
But don’t worry. There are ways to find lower-cost home insurance that actually offers adequate coverage.
Don't pay more than you have to for homeowners insurance. Follow these tips to find good coverage at an affordable price.
1. Read the fine print
Before choosing a low-cost home insurance policy, make sure you review the details of your coverage. In some cases, a low cost could equal less coverage, which could mean you’re not protected when you need it.
One thing to look out for: if your policy is written on form HO-1 (also called a “named perils” policy), your protection will be limited. A named perils policy only covers you for events explicitly named in the policy, which means the carrier has lots of wiggle room to deny claims.
2. Check online reviews
Once you’re satisfied that the policy you’re considering offers adequate coverage, do a quick search for reviews of the company you’re thinking of buying from. Pay attention in particular to what customers say about customer service. The last thing you want is a poorly staffed service department: if it’s not easy to get in touch with the company, it won’t be easy to make a claim. That will be doubly (or triply) true in the event of a major disaster that hits lots of customers at once.
3. Ask about special offers
Home insurance companies are all about pricing risk accurately, so if you can show that your house is less risky than others, you may be able to snag a lower-cost policy. For example, many home insurance companies offer lower prices for homes with roofs that are likely to withstand high winds. If you’ve been meaning to get a new roof anyway, this could be a great way to kill two birds with one stone: update your roof, then save money on your insurance premiums.
Another common way to save is by installing a home security system.
But keep in mind that every insurance company is different. If you’re making an upgrade with the hope of saving money, be sure to check with your insurer about the details first.
4. Talk to your neighbors
Finding low-cost homeowners insurance in Florida and other catastrophe-prone areas can be tricky. But you know who probably has a risk profile similar to yours? Your neighbors. So have them over for coffee or stop them in their driveway and ask if they’ve got any tips. You may discover a great savings opportunity – and you may even make a friend.
5. Raise your deductible
As with most types of insurance, a higher deductible on a home insurance policy will usually mean a lower cost on your premium.
But if you do this, proceed with caution. Remember: in the event of a claim, you are responsible for paying your full deductible before you’re eligible to receive any benefits from your insurance company. That means you should never have a deductible higher than what you can afford to pay out of pocket.
If you do choose a higher deductible, consider setting that amount aside in an account you don’t touch so that it’s there in case of emergency. If you don’t have that amount available today, consider starting a fund for it and only raising your deductible when you’re ready to pay a higher amount.
6. Understand the factors that impact your premium
There are many factors that impact your home insurance premiums. Some are within your control, while others aren’t. Here are just a few to keep in mind when shopping for policies:
-
The amount and types of coverage you choose
-
Your home’s age
-
Your home’s construction style
-
Your home’s loss history
-
Your claims history
-
Your credit
-
Specific features of your property that may make it more or less prone to loss
-
Eligible discounts and other savings
7. Shop around – and go online
If you’ve been renewing the same homeowners insurance policy with the same carrier for years, you may be able to save money by switching carriers. Before you call up all the insurance agents in your community, though, try an online search. New technology (including the use of big data) means that some internet-based startups are able to offer better rates than the established players you’ve heard of.
There are other reasons why local agents may not be able to offer the best rates. For one thing, they’ve got a lot of overhead (like renting an office) to pay for that online companies don’t. (Read more about why local agents might cost you more.)
Another benefit of shopping online: you may be able to see and compare costs instantly.
Want to see if Kin has a low-cost home insurance option for you? Apply now, and you’ll know within minutes!
