Saving Money on Home Insurance | Lloyd Sadd
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Saving Money on Home Insurance

If you are a home you have probably purchased insurance and have no idea where the cost comes from. It is a combination of loss ratios and actuarial data which is all really complicated and boring. Your broker can help you navigate ways that are within your control to be able to save money on your home owners insurance policy.



Multiple Policies — Do you have an automobile insurance policy? If so, is it with the same insurance company that provides your homeowners insurance? If the answer’s no, you’re paying too much — for both policies. Almost every insurance company that sells home insurance wants its policyholders to also buy auto insurance from them. So, they offer “multi-policy discounts” to entice you. Usually, these discounts are at least 10% — and some insurers apply the discounts to both the auto and the homeowners/renters policy.



The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $250 deductible and you file a claim for $1,000 in damage to your home, you pay the first $250 and your insurer pays the balance, $750. The higher your deductible is the less you pay for your policy. Of course, you risk more out-of-pocket if you have a claim, but you save on your premium each and every year.



New Is Better — Insurers really like newer homes. That’s because it’s less likely something will go wrong with the electrical, heating and plumbing systems. In addition, the structure itself is in better shape. Insurers offer discounts of as much as 8% to 15% if your residence is new. Also be mindful if you have made any improvements to your home for the roof, heating, plumbing and electrical. If your house is old insurers may assume the building and its systems are as well. Tell your broker if you have any updates.



Location, Location, Location — Where do you live? If your home is near a fire station, you will pay less for your home insurance. If your neighborhood has fire hydrants you will pay less for your home insurance. If you live in an area that is prone to flooding, coverage may not be available for flood or might be really costly.  Where you live will impact the cost of your home policy.



 Your home policy includes an automatic protection limit for your personal property. This amount IS adjustable. If you don’t need all that protection you can lower it to save some money. But be careful. You may also need more. Your broker should help you with a quick personal property calculation. Also, pay particular attention to items subject to special limits (as described above), items such as jewelry and computer equipment.



some vacuum brands have attachments specifically for removing pet hair. Do your research as there are many that work with various results. Search the web for reviews before buying one of these.



Smoke detectors, burglar alarms and deadbolt locks are usually worth discounts of at least 5% on your home policy. You may get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company. However, not all of these systems qualify for discounts with all insurers. Before you install one, check with your insurer to find out what type of system qualifies for a discount and how much you would save on your premium if you installed the system.



Another item found at pet stores or car detailing stores that can be rubbed on the carpet or upholstery to gather hair into clumps that can be vacuumed up.



Where there is smoke there’s fire. Smoking (unattended cigarette butts, etc.) produces more than 23,000 residential fires in this country each year. That’s why some insurers have discounts if all the residents in a home are non-smokers.



Virtually every home policy includes an automatic inflation adjustment every year. This means the company automatically increases your Dwelling Limit every year. The idea is to keep up with the rising costs of rebuilding your home and make sure your insurance will completely rebuild your home. That’s a good thing! But over time this automatic inflation adjustment can get out of whack with reality. If you think your Dwelling Limit is too high, ask your broker to run a new replacement cost estimate. You may be able to lower your costs while still being fully protected.



Giving consent for a soft hit on your credit will not affect your credit in a bad way nor will it cause you to pay more or be denied for insurance. If you do fit within a credit band where the carrier deems you a better risk the discount can be significant. We always recommend giving credit consent as it can only decrease your premium or simply do nothing.