How to Reduce Property Insurance Costs
Save Money on Home Insurance without Compromising Coverage
Jun 16, 2009
Cutting the cost of property insurance allows a homeowner to save money that can be used to help with other essential household bills. It is possible to reduce home insurance premiums without the need to sacrifice the quality of coverage. Whilst some consumers will be prepared to increase insurance deductibles, others can lower costs if they are prepared to compare insurance costs online.
Buy Property Insurance and Other Policies from the Same Provider
Purchasing property insurance in conjunction with other means of coverage can mean that a homeowner will enjoy a discount on their insurance premiums. According to Lew Sichelman of the LA Times: "Some insurers will cut their premiums up to 15% if you buy two or more policies from them."
Higher Insurance Deductibles
A higher insurance deductible will result in lower monthly insurance premiums. This simply means that a homeowner will need to pay more towards an items replacement in the event of a claim. The provider receives fewer time consuming claims which allows them to pass on some of the savings.
The Insurance Information Institute recently produced information showing that increasing the insurance deductible could have the following effect:
- An increase from $250 to $500 - Save 12%.
- An increase to $1000 - Up to 25%.
- An increase to $2,500 - Up to 30%.
Compare Insurance Online
Purchasing coverage from the first place looked at is rarely a sensible idea. An increasing number of homeowners now prefer to compare property insurance premiums online at sites, such as insweb.com. Trawling the market allows a consumer to save money and compare key product features.
Check for Errors on Personal Credit Reports
Insurers believe that a personal credit score is indicative of risk. This means that it is used not only to underwrite risk, but also to set insurance premiums. It is sensible for a homeowner to check their credit report for any errors in order to get them corrected before applying for property insurance.
Long Term Property Insurance Policyholder
Homeowners who hold property insurance for an extended period are likely to enjoy discounts on their insurance premiums. According to Lew Sichelman of the LA Times: "You may get a break of up to 10% if you're a longtime policyholder, say, for six years or more."
Age-Related Discounts on Home Insurance
Over-55's will often benefit from lower insurance premium as they pose a lower risk to the provider. Individuals spending a higher proportion of their time at home are far less likely to face a break-in. Catastrophic house fires are also less probable because they can be identified and extinguished before extensive damage takes place.
There are a number of ways for all homeowners to save money on the cost of property insurance. All consumers should, at the very least, compare insurance premiums online or increase their insurance deductible.
Those that found this article useful may also be interested in taking out critical illness insurance or life cover to protect their families. Pet insurance can also help families save money on veterinary bills.
Sources
Sichelman, Lew. (June 7, 2009). "Don't reduce your property insurance coverage to reflect lower home values." LA Times.
Disclaimer: This article in no way attempts to give legal advice. One should consult a licensed insurance agent or other qualified professional for more information about property insurance.
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