Home insurance is an important part of homeownership, and it comes at a price. Fortunately, there are ways you can get cheaper home insurance while still protecting your home. Here’s what you need to know when looking at your coverage options, from liability coverage to water damage, flood damage, a rental property, personal property and much more.
How to Find Cheaper Home Insurance
The first step to finding the cheapest home insurance is to not purchase the first policy you come across. You should request and compare multiple home insurance quotes to find the best price. It may take a little more time, but it’s well worth it if you can save money with a cheaper homeowners insurance quote. Remember, each homeowners insurance policy is different, and you can make adjustments to your homeowners policy as much as you like.
You can also consider going to different sources for your home insurance. Most insurance providers offer a free quote tool on their websites. You can even use a website that gives you quotes from multiple companies. Local agents are also useful and may be able to help you find other home insurance options. Agents might also be more willing to compete and outprice each other to keep you as a client, which could work in your favor.
One factor that affects home insurance costs is the location of your home. If you’re in the process of buying a home, this is something to keep in mind. If your home is located in an area that has a history of events that could lead to you claiming on your policy, that could increase the cost. For example, if your home is in an area where there are often thefts or vandalism, your home insurance provider would consider your home more at risk for those types of claims. The same thing goes for weather events. It’s especially important to consider whether the home is in a flood zone because extra flood insurance could be required.
Finally, you should look into the discounts that you may be eligible for. It’s usually a good idea to use the same insurer for both your home and your vehicle so you can get a multi-policy discount. Insurance bundling is quite effective, and it often simplifies your finances. Insurers may also offer benefits to military members and senior citizens. If you have smoke alarms, burglar alarms or other security and safety features in your home, that could qualify you for a discount as well. Be sure to ask your insurer about its discounts to make sure you’re receiving the discounts that you are eligible for.
Adjusting Homeowners Insurance to Save Money
After you’ve identified a homeowners insurance policy that you want to purchase, you can still find additional ways that you can save money. Most online quotes will allow you to make some adjustments to see what your savings opportunities are. You can also speak with either a private insurance agent or the provider’s agents to ask about the adjustments you could use to save money.
One of the first things you should look into is your deductible. As a general rule, the lower your deductible is, the higher the insurance premium will be. You can increase your deductible to lower your monthly premium. However, if you ever make a claim, you’ll need to pay more out-of-pocket to meet your deductible before your insurance policy will kick in. The right deductible for you comes down to your own personal preference. Would you rather pay a higher monthly premium for the peace of mind that comes with having a lower deductible? Or would you rather pay a lower premium and take the chance of higher out-of-pocket costs if you have to file a claim?
Another huge consideration that you’ll need to take is the market value of your home and the insurance value of your home. The market value of your home is based on how much it would be worth if you were buying or selling it. The insurance value is the amount of coverage that you’d need to rebuild the home. To determine the amount of coverage that you’d need, you want to consider the cost of materials in your area and what would be needed to rebuild your home if it were destroyed by a natural disaster.
Also, think about how much it would cost to replace all your belongings. Your land doesn’t need to be taken into account when determining your insurance value, but you should account for any extra dwellings or fencing on the property and what it would cost to replace or rebuild those.
Personal property is difficult to insure in some cases because a replacement value policy is different from an actual cash value policy. You want to insure collectibles and valuables for what it costs to replace them today—not what you paid many years ago. Expensive items are not meant to be repurchased, but you’ll have to without the proper insurance.
You might also consider whether purchasing a security system could help you save money on your home insurance costs. Having a security system can reduce the likelihood that your home would be vandalized or broken into. Other things like a smart smoke alarm and a sprinkler system could help you save money as well. Your insurance provider should be able to tell you how much you would save on insurance premiums if you have these systems in place.
Check Every Year
Just like you shouldn’t purchase the first home insurance policy you find, you shouldn’t automatically renew your policy every year. When it gets close to time to renew or purchase a new policy, it’s a good idea to get new quotes, just as you would if you were shopping for a policy for the first time.
You should also consider what has changed in your home over the last year. Did you add on to your home? Install new security systems or smoke alarms? You’ll want to make sure that your coverage amount is still adequate if you’ve made changes. You may also be eligible for discounts that you weren’t eligible for when you initially purchased the policy, so it’s a good idea to talk to your insurer to see what they can do.
Flood Insurance for Homeowners
While a standard home insurance policy does cover many causes of damage, it does not cover damage from flooding. If you live in an area where flooding isn’t a concern, this isn’t a big deal. However, if you do, you may be required to purchase flood insurance in addition to home insurance. This policy can get very expensive, and unfortunately, some homeowners don’t realize that they need flood insurance until they’re already entered a contract to buy their new home.
In some areas, flood insurance is recommended, but it’s up to you whether or not you want to get it. Other places require it. You can check whether your home is in a designated flood zone by looking at Federal Emergency Management Agency (FEMA) flood maps. If the zone begins with ‘A’, you’re required to have flood insurance on that home. If you’re in the process of searching for a house to buy, check the flood zone before you make an offer on the home so you don’t run into any unfortunate surprises later.
If your home is in a flood zone that requires flood insurance, you can call your insurance provider to ask who their partners are for flood insurance. Just like with home insurance, you’ll need to make a list of flood insurance providers so you can get and compare quotes before you buy a policy.
Does Your Realtor Have an Insurance Person?
Realtors are a great resource for pretty much anything and everything related to homeownership. If you’re buying a home, ask your realtor if they recommend or partner with any insurance companies.
Make Sure the Home is in Good Repair
When buying a home, you’ll also need to keep the condition of the home in mind for several reasons. First off, you’ll certainly want your home to be in a safe and liveable condition. Buying a home is expensive all on its own, and it might be attractive to go for a less expensive house that needs some work. But you need to consider how much fixing the home will cost because those things add up quickly. Homes that need extensive work or have certain features can also drive up the cost of a homeowners insurance policy. For example, finished basements, trampolines, fireplaces and swimming pools can drive insurance costs upward. Things like cesspools and septic tanks could also make your home insurance more expensive.
Compare Home Insurance
There’s a lot to know and understand about home insurance, and it’s always a good idea to have an insurer that you trust by your side. Here are some of Benzinga’s favorite home insurers to help you start your search.
Find Affordable Home Insurance Today
Whether you’re getting ready to buy a new house or you’re about to renew your homeowners insurance policy, finding an affordable home insurance policy is important. Benzinga’s guides are here to help you stay informed and find the best insurance policies available today.
Frequently Asked Questions
What home insurance company is cheapest?
Unfortunately, no insurance company is the cheapest for everybody. Your insurance policy’s premium and coverage amounts are based on the location of your home as well as the structure of the home itself. That’s why it’s important to do your research and get quotes to find the best policy for your situation.
What should homeowners insurance cost?
The cost is also largely dependent on your situation. You may be able to talk to your neighbors who have a similarly sized home to see what they’re paying to get an idea of what’s typical for your area. But even then, your home’s policy could be higher or lower than what your neighbors are paying.
About Ashley Hart
Ashley Hart is a personal finance writer passionate about helping people feel empowered to take control of their finances. She has more than eight years of writing experience, focused on insurance.