Let’s face it, everything is more expensive now, and that includes your house insurance. Even your brokers and agents feel the pressure of higher insurance premiums. When making your budgets this year, consider these money saving tips on your policies.
- Multi-Policy/Combined Discounts
- Soft Credit Check
- Higher Deductibles
- Home Updates
- Discounts (alarm, backup generator, non-smoker, etc)
- Correct 911 Address
- Home Details (unfinished basement, sump pump, etc)
- One Time Payment
- Look at Other Markets
Most insurance companies offer a Multi-Policy discount. These discounts could save you up to 10% on both your property and auto insurance premiums. If you are with separate companies for your home, auto, commercial, or farm policies, it may be time to quote the policies with the same company.
A Combined Policy discount is also available with some insurance companies. A combined policy discount will make your home and auto policies become one policy. Usually Combined policies will come with perks or incentives. Perks range from disappearing deductibles to higher percentage discounts. Combined policies also usually carry hefty 15%-17.5% discounts. We feel this is reason enough to consider combining your policy if your insurance company offers it.
Soft Credit Check:
Soft credit checks are still fairly new in the insurance industry. When you consider that the modern insurance industry dates back to the 17th century, anything in the last 5-10 years is very new. Not all insurance companies will offer a soft credit check, but if you are lucky enough to have a company that does, it could be well worth your time to call. Giving your insurance company permission to run a soft credit check will allow them to get your credit score. The majority of companies will not pull your full credit report, but just the credit score. Companies will consider someone with good credit as a good risk. They factor that if you have good credit you are more likely to fix things around your house before they become a problem.
Most people will know that if they raise their deductibles, it will lower their premiums. Some companies will offer the ability to change not just the deductible on your entire policy, but individual coverage deductibles on certain endorsements. For example, you could raise your deductible on your sewer backup or overland water endorsement. With certain companies, a large chunk of your premium will be in your water damage coverages. If you feel you could pay a higher deductible if a certain insured peril happens, then it might be a way of saving money on your yearly premiums, while keeping the same coverages.
Every company offers different discounts, but they almost all offer a lot of possible discounts. Call your broker or agent to find out what discounts you could have on your policy. Discounts range from non-smoker discount to a discount for having a backup generator. One of the larger discounts that many companies offer is a mortgage free discount. If you have paid off your mortgage, make sure your insurance company has a release of interest from your financial institution so they can take your mortgage off your policy. The mortgage free discounts could save you up to 10%. If you have a centrally monitored alarm system, or even a septic tank you could be missing out on discounts. Don’t leave discounts you qualify for stay on the table to the benefit of your insurance company. Call your broker today.
Correct 911 Addresses:
A lot of insurance companies are going to an individual rating system for their home insurance policies. This means that some companies are basing your premiums right down to the longitude and latitude location of your home. If your insurance policy shows your “risk” address with a PO Box or a Rural Route (RR 1) then it could be causing an issue with the rating on premium. Have your insurance broker confirm you are not being affected by this.
With insurance companies going to an individual rating system, it is critical that you inform your insurance broker/agent about updates around your home. The year of your roof replacement to the year of your hot water tank could be a factor in the premium you pay. If you have switched from an oil heating system to a natural gas heating system then you might be paying a surcharge for something you no longer even have.
With companies narrowing down how they rate your policy it is a good idea to review your home with your broker/agent. There could be cheaper premiums if they know you have an unfinished basement or even if you have an automatic sump pump. Keep your insurance broker/agent up to date on home repairs and any major change in your home. Your premium could be greatly affected by wrong information on your file.
One Time Payment:
You may not realize that you are paying a financing fee on your insurance policy. If you are chunking your premium into payments or paying for your insurance monthly, then there is a great chance you are being charged up to 3% extra for financing. If you are in the financial situation where you are able to pay for the insurance premium in a onetime lump sum, it could be an opportunity to save some money.
Look at Other Markets:
Last but not least, if you have not been able to shave enough money off of your insurance policy with the tips above, then you could check other insurance markets. If you are lucky enough to have an insurance broker who handles more than one insurance company, you should ask them to check their other markets for you. It is always a good idea to keep a long running relationship with your insurance company, but it’s not a good idea to pay a lot more for insurance then you should be. Your broker can take your policy to several different insurance companies to see what the best fit for you is. It doesn’t hurt to make sure your company is still being competitive in their premiums.
No one likes to pay a lot of money on their insurance. It may even feel at times like you don’t even need the insurance policy or that they are ripping you off. One thing to keep in mind is that they are insuring your highest priced assets for the worst case scenario. If your house were to burn down and the insurance company pays to remove the old house and rebuild your new home, they could be paying out hundreds of thousands of dollars to replace your home. They could not possibly make that money back on the couple of thousands of dollars your yearly premium is. When you look at the business risk in this light, it sometimes makes the premiums that you pay not seem that bad. With that in mind, we all still like to save money where we can. The points outlined above are a fantastic way of making sure you are getting the best premium/coverage combination for your hard earned dollars.