First Federal Bank Blog

Homeowner’s insurance is a necessary but costly expense to safeguard the money you’ve invested in your house. Yet you may be paying more for home insurance than you need to. There are ways that you may be able to reduce your rates and keep more of your money for improving your house instead of insuring it:
 
Ask about discounts
 
Here is an easy action you can take to knock some dollars off your insurance premiums. Ask your insurer about all of the discounts they offer to determine if you’re eligible for any rate reductions. NerdWallet contributor Doug Sibor lists some lesser-known ones, such as having a specific career, using paperless billing and automatic payments, and no residents smoking.
 
Bundle your policies
 
Many insurance companies offer discounts if you bundle more than one policy with them. Obtain a quote from your home insurer on adding auto insurance or another policy you need, and then run the numbers to see if it’s worth switching.
 
Withhold on making minor claims
 
How often do you file claims? While it’s tempting to get some money from your insurance company to pay for minor fixes, it may be cost-effective to pay for those repairs out of pocket instead of filing a claim.
 
“Homeowner’s insurance companies can penalize you over time for being a high-risk customer or making many claims,” cautions the This Old House team. “So if the damage is affordable, it may be more beneficial to pay for it out of pocket than to file a claim.” Remaining claim-free for an extended period may even qualify you for a discount.
 
Improve your credit score
 
Did you know having a higher credit score may earn you a lower homeowner’s insurance rate? Improving your credit score has many financial benefits — including for home insurance. “Someone with poor credit would pay 94% more for homeowner’s insurance than someone with good credit, on average, according to NerdWallet’s rate analysis,” shares Sibor.
 
Ensure you’re paying all of your bills on time, only using a fraction of your available credit, and actively maintaining your current accounts instead of opening new ones. If it has been a while since the insurance company has run a credit check, ask them to reassess your situation before you pay for your next renewal.
 
Make crucial home improvements
 
Find ways to make your house more durable to resist disasters and deterioration. Consider installing storm shutters, fire-resistant roofing materials, updated electrical systems, and improved plumbing. “Taking these steps to shield your home from costly claims can also earn you lower home insurance rates,” explains MarketWatch writer Parker King.
 
Adding a security system may earn you a discount, as could adding a sprinkler system with a fire monitor. These upgrades may even wind up paying for themselves in the long run with the money you save on annual premiums. Speak with an insurance representative first to ensure any improvements would ease your rates.
 
Raise your deductible
 
“Increasing your deductible puts money in your wallet every month that otherwise would have gone to your insurer,” points out Sibor. Your deductible should align with the limit of what you’d be willing to pay out of pocket for a repair.
 
For instance, if you only would pay $500 for a repair, you shouldn’t have a $1,000 deductible. On the flipside, if you would pay up to $1,000 for a repair, a $500 deductible can be raised to $1,000. Just make sure you have enough protection and financial capability in case disaster does strike.
 
Talk with your agent every year before paying your next home insurance renewal. Have a conversation about anything that has changed with your situation and what you can do to lower your rates.