Home insurance, also called homeowners insurance, is not a luxury; it’s a necessity. Pretty much all mortgage lenders require borrowers to have home insurance coverage for the fair or full value of the property. Without proof of insurance, you may not receive a loan offer from lenders. However, given that it’s a recurring expense, there’s no denying that the monthly premiums can strain your budget. If you’re struggling to pay your premiums, check out these tips to lower the cost of home insurance.
Install a Security System
A burglar alarm can help lower your premiums — usually by at least 5%. To obtain this discount, you’ll need to provide the insurance company with proof of the installation.
Increase Your Deductible
If you already have car or health insurance, you likely know what the deductible is. Raising it can give you a break in your premiums. However, keep in mind that if you increase your deductible, you’ll have to pay more money upfront when you make a claim.
Consider Bundling Your Policies
Many insurers offer substantial discounts to customers who have other contracts with them. For instance, if you purchase your home, car, and health insurance policy from the same insurance provider, they will likely offer you a “bundling” discount.
Pay Off Your Home Loan
We know this is easier said than done, but homeowners who repay their mortgages in full see a substantial drop in their premium almost immediately. Wondering why? Most insurance companies assume that if your home is 100% yours, you’ll end up taking better care of it.
Compare Rates from Time to Time
If you’ve been with your insurance company for over two years now, consider checking how much other insurers are charging. Sometimes, a drop in the value of your home or other such things that are outside your control can help you score a more affordable home insurance plan from another company.
Plan Your Renovations
Thinking of renovating your home? Make sure to consider how it will affect your premium. For instance, renovating your home to make it less likely to succumb to adverse weather can lower your premiums. However, installing, say, a swimming pool or trampoline in the backyard can actually increase your premium.
