Day 5: Lower Your Home Insurance Policy

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This post was originally part of my 31 Days to Radically Reduce Your Expenses series, which has been completely revamped and updated for publication. It contains over 70% NEW content not found anywhere on the blog! Learn more about the book your budget has been waiting for.

Don`t let your home insurance policy become a once-and-done kind of deal. Here are 6 ideas to reduce your homeowner`s insurance even further while still accessing top-notch coverage. #3 is such an easy fix! {31 Days to Radically Reduce Your Expenses, Day 5}

I know, I know. Home insurance policies are just not as exciting as cutting your grocery bill or finding great deals at a neighborhood garage sale, but…..we have to talk about it. Because the average homeowner spends approximately $900/year on an annual policy — and that’s a lot!

We don’t want to ever think about needing home insurance, but so much can go wrong when you own such a big asset, not to mention all the floods, hurricanes, tornados, and other natural disasters that require additional policies. Plus, if you’re beholden to any type of bank, they most likely require proof of insurance before they’ll hand over any money. All-in-all, it’s a really good thing to have!

But before you think your homeowner’s policy as a once-and-done kind of deal, the truth is, you need to be your best advocate and stay on top of that rate. Although we do want to protect our investments to the fullest extent, we also don’t want to pay out more than we have to.

Here are a few ways to make sure your policy is the lowest it can go, while still providing top-notch coverage!

How to Reduce Homeowners Insurance:

1. Shop with an Independent Agent – Joseph and I have continually received the best deals by working with someone who isn’t loyal to any particular company. These agents are trained to do all the research and prep work for you, and make sure you always get the lowest rate. I don’t know about you, but that saves a lot of time and headache on my end! We’ve also found that the best way to find an agent you trust is by word-of-mouth, so start asking your friends who they use and recommend right away. These agents should be a free resource for you because they are paid by commissions from the insurance companies.

2. Choose a Higher Deductible – A higher deductible almost always results in a lower rate, but it also means you could be caught without enough cash if something terrible did happen to your home. If you decide to go higher, make sure you have enough of an emergency fund to cover the deductible if you have to meet it.

3. Drop Unnecessary Coverage – We don’t personally have super expensive electronics, artwork, or jewelry, but if you’ve been insuring those pieces and sold them in the past year, let your insurance holder know so they can reduce your rate. You don’t want to be insured any more than you absolutely have to!

4. Improve Your home – As you slowly make improvements to your home, you might want to focus first on the items that could reduce your policy and give you a decent discount. An alarm system, deadbolts, wind-resistant shutters, updated electrical wiring, and a better roof are just a few. Be sure to check with your specific insurance company for details on exactly what’s included before you spend any money.

5. Bundle Your Policy – This isn’t always the case, but you can often save significantly on your annual payment just by listing your Home, Auto, and Liability insurance all with one insurance agency. But don’t forget to do the math and break down the totals to make sure that is truly the case!

6. Maintain Good Credit – Believe it or not, insurance companies take a look at your credit score before deciding how much they will charge you for a policy. If your credit isn’t squeaky clean, make an effort to fix it as soon as possible. Start paying all your bills and credit card payments on time, and don’t max your limits. And always always always check your report at least once a year for discrepancies – I was once mixed up with my sister’s college loan for the longest time because I didn’t check!

Check your credit score for FREE.

Need to Reduce Even More Monthly Expenses?

Whether you crave extra room in your budget, or want to save towards a future goal, 31 Days to Radically Reduce Your Expenses is your must-have resource to tackle both.

This book is jam-packed with practical advice to slash costs, lower monthly bills, and put more money in your bank account every month!

Get a peek at the Table of Contents and download a sample chapter HERE. Or, if you’re ready to take the plunge, you can purchase this guide directly on Amazon.

How do you plan to reduce your mortgage?


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  1. This is a very misleading article. As an insurance agent, I see many things wrong here. Independent is not always the way to go. They do have several companies to work with, but some of their companies may offer more commission or incentives that would cause them to push you in one direction. Not always the case, but many companies such as Allstate and state farm ALSO have other companies they can shop your policies through. Also, most of the time you can’t consolidate anything into ONE policy. Keeping them all with one company could save you money, but they will never be ONE policy. If that was the case, you would have to change all of your policies anytime you made a change to one. A car and a home are not the same thing so they will never be under the same policy. I can’t even write all the issues I have with this. Just make sure you consult an expert next time you write something trying to tell people how to save money. Articles like this is how people wind up underinsured, and with many insurance issues.

    1. Hi Jane, thanks for your input. I’m always glad when people involved in a topic I write about weigh in on the discussion! I changed #5 to reflect bundling as opposed to consolidation. While bundling is what I meant – it sure isn’t what I wrote!

      As far as independent is concerned – I can only speak from personal experience as I do on all my topics, but I have always saved more through them. Any time I have shopped on my own I have always ended up with quotes higher than what I get through the independent firm. That said, I am not loyal to any one independent agency and when I hear someone got a better deal through someone else, you bet I’m giving them a call to see if they can get me a great deal too! I understand that Independent may not always be the least expensive route….but I don’t think I claimed that in the article either, I laid it out as an option.

      When it comes to being under-insured, I understand! That is why I did not suggest that readers reduce their liability coverage. It just takes one lawsuit {or one crash into a luxury car with poor auto insurance} to financially ruin you. Any reduction in coverage I suggested people consider is tangible items that if they lost them, they may not need them replaced right away.

  2. If you are going to use these methods there are a couple things to understand first. One, know that an independent broker can’t give you rates for any major insurance company such as State Farm. Two, using these methods of rate reduction can be harmful to you when/if something happens if you don’t fully understand how your policy works. Each companies policy can work differently so knowing how one companies policy works isn’t enough. You need to ask if there are limits on certain items and know if the answer to that affects you. You also need to properly and honestly assess what deductible is right for you… If you know you won’t save the money, a lower deductible might be better for you. But if you have an emergency fund and know you’ll be able to cover anything that comes up, then a higher deductible might be right for you. Three, review your policy with your agent every year… Knowing how your insurance would apply in case of an incident is the best way to ale sure your insurance isn’t a waste of money and instead does exactly what you want it to do at the time of a loss. The two things that are really valuable is meeting with your agent and putting your home and auto insurance with the same company generally does save you money, but remember a broker won’t necessarily place your policies with the same company therefore you might not see that discount everywhere. Overall, be diligent and ask questions, that’s the best way to keep your premium down without losing valuable coverage.

  3. We went with an independent agent, paid for a new home inspection ($75), and reduced our current policy by half. That in turned reduced our mortgage by half. Half is very good. It took a little effort but it is going to save us $5000 (that’s right) a year.

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