3 Ways You Can Save On Home Insurance Without Sacrificing Coverage Quality

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Insurance 101: Tips and Tricks to Choosing the Right Policy

Since my parents always added me to their auto insurance policy when I was a teenager, I never learned how to make educated insurance policy decisions. When I moved out of my parents house at the age of 25 and it was time to get my own policy, I was overwhelmed with all of the decisions I had to make. Thankfully, my parents were eager to teach me what each insurance coverage option meant and what the best choices were for me. I learned a lot about insurance during this experience, and I am eager to share what I learned with others on my new blog. I also plan to include many tips on choosing health and homeowners insurance policies, so check back often if you want to learn a little more about insurance!


3 Ways You Can Save On Home Insurance Without Sacrificing Coverage Quality

22 June 2021
 Categories: Insurance, Blog

While securing an affordable rate on home insurance is understandably important to most people, it is equally as important to ensure you are getting quality coverage. After all, the only thing worse than paying too much is finding out that you have been overpaying for coverage that leaves you high and dry when the time comes that you truly need it. Thankfully, with just a bit of legwork, it is possible to enjoy the best of both worlds. Thanks to the simple tips below you can now save money on your homeowners insurance policy without sacrificing the quality of your coverage in the process.

Reduce Your Risk

When the insurance company is determining how much your policy will cost, a large part of this process will involve an overall risk assessment. The algorithms used to determine the risk you represent will vary from company to company and can be extremely complex in nature. However, the basic idea behind these algorithms is that the more likely you are to file a significant claim against the policy, the higher your overall risk factor will be.

Thankfully there are very simple steps you can take to lower this risk factor. For example, choosing to install a security system in your home will reduce the risk that your home will be burglarized and therefore reduce your overall risk of filing a claim. As a result, you can expect to see a drop in the cost of your monthly premiums without the need to make any changes to your coverage options. 

Raise Your Deductible

Another viable approach to reducing the cost of your homeowners insurance is to raise your deductible. While it may seem counterproductive to commit to higher out-of-pocket expenses in the event you need to file a claim, this approach will almost always save you more money in the long run.

For example, if you choose to raise your deductible from $500 to $1,000 in exchange for a monthly premium that is $50 cheaper, you would still save $100 even after paying the higher deductible if you found yourself having to file a claim once a year. Since most homeowners do not need to file a claim even once a year, your overall savings are likely to be even more significant over the long term. 

Reevaluate Your Rebuilding Costs

A major factor that is considered when determining how much homeowners insurance you need to carry is how much it would cost to rebuild your home if it was completely destroyed. The problem is, far too many homeowners make the mistake of confusing rebuilding costs with home value. These two figures are not the same. This is because your home value includes the value of your entire home including the land that it is built on.

Rebuilding costs only include the cost of rebuilding the actual structure since the land does not need to be replaced even if the structure is destroyed. If your current estimated rebuilding costs are equal to your home value, reevaluating this cost can save you money by allowing you to purchase a policy that better reflects your true insurance needs.