Easy Ways to Save on Homeowners or Renters Insurance
Homeowners insurance can serve as a vital lifeline when your home’s exterior or interior – including furniture and other assets – becomes damaged.
Beyond physical damage to property, affordable homeowners insurance can also reimburse you for theft or injury that occurs in the home.
Renters insurance is similar but does not provide reimbursement for physical property damage, only for the renter’s personal assets.
Both forms of insurance can be absolutely essential to your long-term financial wellbeing. As with any expenditure, though, you’ll want to make sure you’re paying as little as possible without sacrificing on quality.
Below, we’ll look at some surefire ways to save money on either your homeowners or renters insurance.
Compare Quotes from Different Companies
First, the most obvious tip – don’t just opt for the first insurance company that seems to provide a good offer. Do your research!
You should first determine how much coverage you need. For homeowners insurance, the lowest amount of coverage you should have is the amount it would take to rebuild your home. How can you possibly determine this?
Well, it’s not as hard as it sounds: take the square footage of your home and multiply this by local construction costs (which you can find on websites of construction companies in your area). Alternatively, you can simply Google “home reconstruction cost calculator” and utilize one of many free resources.
This is important to do so that you can compare costs from company to company for the same amount of coverage.
To compare renters insurance, first add up the cost of your belongings, or at least those belongings that you’d absolutely want to be covered. You should compare not only personal property coverage but also liability coverage (reimburses you for injuries that take place in your apartment) and loss of use coverage (i.e., whether or not the provider will reimburse you for a stay in a hotel if your apartment is unavailable).
Now that we’ve gotten that out of the way, you should look into at least three (preferably four or five) insurance companies for quotes.
Use Google or talk to friends and family members to find good insurance companies. You could also hire an insurance agent who can compare costs for you, though this isn’t necessary unless you really feel you have no idea what you’re doing.
For renters insurance, also be sure to understand the difference between actual cost value and replacement cost coverage: basically, actual cost value coverage will take the age of the item destroyed or stolen into account, and so pay out a depreciated rate, whereas replacement coverage will not.
To give you an idea of what to aim for, the average homeowner’s insurance premium was $1,445 in 2020, and the average renter’s insurance $180 per year.
Increase Your Deductible
An insurance deductible is what you must pay out-of-pocket should you need to make a claim. As an example, maybe your insurance company is offering $5,000 and you have a deductible of $1,000: in this case, you’ll have to put $1,000 and the insurance company will put in $4,000.
Your premium, on the other hand, is what you pay monthly, quarterly, or annually as a sort of “subscription fee” to remain covered.
There’s a direct relationship between the cost of your premium and your insurance deductible – the higher your deductible is, the lower your premium will be. In order to lower the cost of your premium, then, you can opt to increase your deductible.
Of course, increasing your deductible means you’ll have to pay more out of pocket should you need to make a claim. Since homeowners insurance claims aren’t actually filed that often, though, you’ll likely save a lot more money over the long run by increasing your deductible and lowering your premium – with the money you’ve saved, the costs of the deductible will probably be covered!
The same applies to renters insurance. However, keep in mind that, since renter’s insurance is cheaper than homeowners insurance, raise your deductible may not lower premiums much and therefore not be worth it.
Bundle Homeowners/Renters and Auto Insurance
Many companies provide both homeowners and auto insurance and provide perks when you buy both from them.
Esurance, for example, will provide up to a 10 % discount with one of their auto and home insurance bundles and even allow you to pay a single deductible if you file a claim that involves both your home and car.
Allstate, on the other hand, provides discounts of up to 25 % and offers an online quote wizard to clients who bundle insurance policies.
Again, do your research before bundling with an insurance provider – it’s still possible, for example, that you could pay less overall buying auto insurance from one provider and home insurance for another provider than bundling with a single provider.
You can also bundle renters and auto insurance – for instance, Geico renter’s insurance can be bundled with their auto insurance and provides, in our opinion, one of the best auto and renters insurance bundles.
Install Home Security Devices
Insurance providers are businesses, of course, and so they want to save money by lowering coverage for homes and rentals that are at higher risk of having to make a claim. Maybe dirty, but true!
Similar to how auto insurance providers can provide discounts for those who are deemed “safe drivers,” homeowner and renters insurance providers can provide discounts for those whose homes are deemed to be at lower risk of danger.
Consider getting a burglar alarm, smoke detector, and/or dead-bolting your home or apartment. You’ll want to get the best home or apartment security system you can in order to convince providers that you’re less of a risk.
Of course, inquire about any discounts before installing to make sure the money you’ll save outweighs the cost of your security improvements!
Lower Your Coverage Amount
It’s not uncommon for people to be overinsured without realizing it.
For instance, maybe you sold a bunch of items about a year ago – in that case, your personal possessions coverage should be lowered but your provider won’t know this unless you make them aware.
Perhaps your coverage is more than it would cost to rebuild your home. Remember to multiply your square footage by local construction costs to get a good estimate of how much coverage you need.
Look for Other Discounts
Many insurance providers offer discounts. For example, the “senior discount” for those over age 65 is common as people over 65 are more likely to be retired and home during the day, so break-ins are less likely.
You might also get a discount if you don’t smoke as the risk of fires decreases.
Loyalty discounts are common, too, so consider staying with the same insurance provider for a long time, as long as no better deals arise.
Review Your Insurance Policy from Time-to-Time
Sometimes, insurance costs can increase without any warning. As the market continues to alter, year by year, it’s a good idea to look at your costs and compare them to other quotes now and then.
You may find that you can save money by switching to another provider, or save money through bundling your auto and home insurance with them, etc.
Cheap homeowners insurance and cheap renter’s insurance are possible to attain and, after all, isn’t that the point? You don’t want to give an arm and a leg to secure your future, and, by utilizing some of the tips we’ve laid out here, you don’t have to.
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