By Doug Sibor
Home insurance rarely takes the spotlight, but if you’re a homeowner, it could be quietly costing you more money than it should.
The good news is that insurers provide relatively easy-to-obtain incentives that can shave money off your homeowners insurance premium.
Here are nine ways to save.
1. Raise Your Deductible
A quick way to reduce your premium is to raise your insurance deductible, the amount you pay if you have to make a claim. If you had, say, a $500 deductible, you could save as much as 20% by increasing it to $1,000, says Mark Friedlander, spokesperson for the Insurance Information Institute.
Raising your deductible puts money in your pocket every month that otherwise would have gone to your insurer. Just be sure you have enough saved to cover a bigger out-of-pocket expense if you need to make a claim.
2. Make Your Home More Secure
Even the basics can save you money when it comes to home security.
Having a smoke detector, burglar alarm or deadbolt locks on your home can earn you a 5% discount, says Friedlander. Going a step further by adding a comprehensive sprinkler system along with an actively monitored fire and burglar alarm could save you as much as 15% to 20%, he says.
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3. Skip Small Claims
It may be tempting to file a claim with your insurer even when something relatively minor happens, but you may be better off in the long run if you pay out of pocket for these smaller expenses. That’s because some insurers offer discounts if you remain claim-free for a certain period of time, usually a few years.
4. Ask About Lesser-Known Discounts
Unless you check, you may never know what other savings you might be eligible for. Some insurers offer additional discounts if you:
- Don’t have any smokers living in the house.
- Recently bought your home.
- Pay your premium via automatic bank payments.
- Choose paperless billing.
- Work in a specific career, such as teaching, engineering or firefighting.
5. Account for Home Improvements
If you’ve improved your home, you may have made yourself eligible for homeowners insurance discounts without even realizing it. Adding features such as storm shutters and impact-resistant roofing — which make your house tougher to damage — could result in insurance savings. You might also earn a discount by upgrading outdated plumbing and electrical systems.
“You can often request a new inspection of your home to evaluate these improvements to maximize your potential discounts,” says Jessica Hanna, spokesperson for the American Property Casualty Insurance Association.
Concerned about having someone over to your home during the pandemic? Not to worry — Hanna notes that many insurers have virtual and other socially distanced options for inspections.
6. Bundle Your Auto and Home Insurance
Bundling auto and home insurance with the same company typically saves you 5% to 15% on your homeowners premium, according to data from the Insurance Information Institute. Although it could vary depending on your company, many insurers provide discounts if you buy more than one type of policy from them.
7. Build Your Credit Score
It may surprise you to learn that your credit score can have a substantial impact on your home insurance premium. That’s because in many states, companies can use a credit-based insurance score to determine your rates. If your insurer thinks your credit score is too low — such as a FICO (FICO) - Get Report score under 630 — you may pay higher rates.
If you find that your credit score is low, read your credit report closely to identify any errors. You can elevate your score by taking steps like paying bills on time and reducing credit card balances.
8. Get Rid of High-Risk Stuff
Even though it may be fun, having something deemed an “attractive nuisance” by your insurer — think trampolines, swimming pools or playground equipment — can add to your homeowners insurance premium. Getting rid of those items could result in serious savings on your insurance.
9. Shop Around
Rates for identical homeowners insurance coverage can vary widely from one company to the next. Some homeowners could save $1,000 a year or more by finding the cheapest rate, NerdWallet research shows.
Most companies have tools on their websites that allow you to plug in some basic information and get quick home insurance quotes. Comparing different companies’ rates will let you see if you might be able to save by switching insurers.
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Doug Sibor writes for NerdWallet. Email: email@example.com.