Tips For Getting Lower Homeowner’s Insurance Rates

Your home may be the largest investment that you’ll make in your lifetime. So why not make sure that it is fully protected? Homeowner’s Insurance is a necessity for any person who owns a home. Read on to figure out how to get the coverage you need for the price you want to pay.

What does Homeowner’s Insurance cover?

Homeowner’s Insurance will compensate you for damages or losses that you have to the physical structure of your home or to your possessions. Generally, Homeowner’s Insurance will cover:

  • The physical structure of your home

  • Your personal belongings (up to a certain amount)

  • Items on your property (such as a shed or fence)

  • Liability if someone other than your family members are injured on the property

The Cost of Homeowner’s Insurance

Your State

The cost of Homeowner’s Insurance varies greatly based on the state that you reside. You can expect to pay approximately $35 for every $100,000 of home value. To figure out how much Homeowner’s Insurance you need, you need to perform a few calculations. First, figure out how much it would cost to completely rebuild your home if it were destroyed. You need to make sure that your Homeowner’s Insurance covers at least that amount. Do not base this number off your mortgage because the actual value of the home may be higher.

An insurance agent, real estate agent, builder or contractor can help you calculate this number if you need assistance. Keep in mind that you need to recalculate this number at least once a year to compensate for changes.

Tips For Getting Lower Homeowner’s Insurance Rates

Your Possessions

Secondly, take a general inventory of your home and calculate the value of these items. You want to obtain comprehensive coverage so you can get everything replaced if necessary. You may also need to add on a few different things to the policy, which will increase the price. For example, most of the typical Homeowner’s Insurance policies will not cover damages or loss resulting from a flood or earthquake. If you live in an area that is prone to these types of disasters, consider obtaining additional coverage. It is well worth the additional cost. Obtain these additional policies sooner rather than later, too, because it typically takes 30 days for the coverage to actually begin.

How to lower the cost of Homeowner’s Insurance

If you feel like you are paying too much for your insurance currently, check out these ways to lower the cost of your policy.

  1. Do your research: While research does take time and effort, it is important that you know the different options out there so you can make the most informed decision possible. Insurance quotes are free, so take advantage of this. Obtain at least three different quotes to get an idea of what is available. Obviously different insurance companies are going to offer different prices and amounts of coverage. While going with the cheapest option may seem like the smartest thing to do, you also need to consider the amount of coverage you are receiving. Don’t skimp out if it means you won’t be protected in the case of an emergency.

  2. Buy Your Policies From the Same Insurer: If you purchase your home and auto insurance policies, for example, from Nationwide Insurance you can save up to 25 percent. This same type of discount applies to many different insurance companies so it is definitely worth asking about. Plus, it is a lot easier to deal with just one insurance company instead of multiple different ones.

  3. Raise Your Deductable: The higher the amount of your deductable, the less you have to pay in premiums. For example, if you raise your deductable from $500 to $1000, you can save up to 25 percent.

  4. Just Ask: Some insurance companies might have discounts that you did not even know existed. For example, some insurance companies will give you a discount if you are 55 and older. Ask your company for all of the potential discounts. You never know what you might uncover.

  5. Do Not Switch Insurance Companies: Loyalty to your insurer can mean extra money in your pocket. Some companies will offer discounts of up to 10 percent to long-term customers. You typically need to have had the plan for at least five years to qualify.

Stephanie Wilmsmeyer is a State Farm home insurance agent in Columbia, Mo. For more info on affordable home insurance policies and options, follow her on Google+.