Homebuyers usually do not need higher than necessary home insurance rates. No one wants to pay more than is necessary. In spite of this desire to keep costs low, many homeowners are paying more than they need to and will keep on doing so – until they learn what it will take to reduce the high premiums on their homeowner’s insurance policy. Here are some tips to help you avoid the things that will keep your insurance higher than it needs to be.
Learn About Credit and Insurance Scores
Many insurance companies, including those that sell homeowner’s insurance, use a system to determine the risk involved by insuring you. Besides having a credit score, you also have an insurance score – which is different.
Insurance scores start out with your credit score and then have other figures added to it. This would include past costs to other insurance companies and includes auto, health, home, and other kinds of insurance, too. The exact formula will change from one company to another, but it is clear that your past insurance experiences are part of the formula.
You can improve your insurance score by starting out with your credit score and improving it. Then, you may be able to improve your insurance score by keeping the number of your claims down – if possible.
Find Out About Past Problems and Insurance Claims
Another thing that may raise your insurance premiums is the number and type of claims that your home has had before. While the past cannot be changed, insurance companies generally know that if a home had a lot of claims in the past (even if it was a different owner), then it probably will continue to do so.
You can change this pattern, by finding out what type of claims have been submitted in the past, then working to get a permanent solution to the problem. Take evidence of the corrected problem to your insurer and you may be able to have your rates lowered.
Take Time for Modifications to Lower Your Insurance Rates
Insurance rates are also partly determined by a lack of, or the presence of, safety or preventative features. If you increase the security around your home, you can be sure to see a decrease in your home insurance premiums. Find out what brands and type of security devices, smoke and fire alarms, etc., will give you the largest discounts before you buy.
Only Insure According to Your Needs
Home insurance only needs to cover the structures on your property – not the land itself. Since nothing can happen to the land, this will help keep your costs lower – where they need to be. Also, you will have a better investment if you insure according to replacement value rather than for actual value. Although actual value is cheaper, it may not give you enough to rebuild your home later – especially if you have an older home.
One other thing – pay off your mortgage. A home owner insurance company will often charge less once the mortgage is paid because they believe that an owner will take better care of their home once they own it completely.
Each of these tips will enable you to lower your home insurance prices a little more. For more ideas, talk to your home insurance agent and stop spending more than you need to.