Cheap Homeowners Insurance
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Finding low cost homeowners insurance coverage can be tiring and time-consuming. Use our comparison tool to make it quick and easy. Enter your Zip Code in the form above and you will be on your way to comparing the best insurance providers in your neighborhood. Get multiple quotes and choose the best deal within minutes. Below you will find a thorough guide on how to get affordable coverage for your home.
In theory, getting a cheap homeowners insurance policy sounds like a piece of cake. You would think that all you have to do is make a call to insurance providers and ask them for the cheapest cover. That sounds like a foolproof plan, but as with all cheap things that come easy, it’s going to be costly in the long run; the price tag shouldn’t be your sole basis of merit when it comes to looking for a good policy. You have to remember that the home insurance not only protects your house structure but also covers damage and injuries that might occur to someone when they’re at your place.
- 1 Types of Home Insurance Coverage and How Much Coverage You Need
- 2 How to Find Cheap Home Insurance Coverage
- 2.1 Tip #1 Look around
- 2.2 Tip #2 Increase your deductibles
- 2.3 Tip #3 Do not mistake the buying cost of the house for the rebuilding costs
- 2.4 Tip #4 Your vehicle and home insurer should be the same
- 2.5 Tip #5 Disaster-proof your house as much as you can
- 2.6 Tip #6 Upgrade your security
- 2.7 Tip #7 Check for other discounts
- 2.8 Tip #8 Have a good credit record
- 2.9 Tip #9 Stick with your insurer if they serve you well
Types of Home Insurance Coverage and How Much Coverage You Need
There are different categories of homeowners insurance covers based on the level of damage they insure against. They are denoted by the numbers HO-1, HO-2, HO-3 and so forth. A good example of not going too cheap is the HO-1 policy which is so basic that most companies have stopped selling them. HO-2 also referred to as broad form policies differ from the special form HO-3 policies on the grounds that the HO-2 is specific on everything that they cover while the HO-3 does not. This means that if something happens to your home and is not specified in the cover, you’re out of luck. HO-3 policies cover everything and anything that could happen to your house except what they specifically say that they can’t. These include floods, earthquakes, and war. This makes the HO-3 policies more popular.
HO-5 covers are similar to the HO-3 with the addition of personal belongings being included in the policy. It is important to note that there are policies set aside for special circumstances. They include:
- HO-4 for renters
- HO-6 for condo owners
- HO-7 for manufactured and mobile homes
- HO-8 for older homes
With that being said, it is wise to always ask the insurer to give you the full list of exclusions from the cover that you want to purchase. You might be shocked at some of the things that might be left out.
Estimating How Much Coverage You Need
So how would you estimate how much insurance policy you need?
- Hire a professional to help you calculate how much it would cost you to replace your home in the event of a disaster. This would be the amount required to replace your home piece by piece without changing a thing. Experts want that you might find this number different from your home’s market value.
- You need to think about your possessions too. It’s only good practice to cover your possessions so that your life doesn’t have to start over in case of a catastrophe.
- Include a liability policy to cover the event where somebody might get hurt on your property. Things happen and you do not want the judge to decide what compensation you should pay to the victim.
- Think of special incidents. Is the place you live prone to floods? Considering this will help you choose the right cover for your property.
3 Types of Coverage Levels
After you have done your homework, now you need to decide between the three standard coverage levels for your policy. They are:
- Actual cash value: It is the cheapest home insurance level because it accounts for depreciation of your property; thus it will pay for only what the property would be worth today.
- Replacement cost: This level does not factor in depreciation but subjects payouts to policy limits
- Guaranteed replacement cost: It also doesn’t account for depreciation but does allow you to stretch the policy limits meaning that you can pay the necessary and more to ensure full replacement of your property. As you might imagine, they are very expensive and hard to come by.
How to Find Cheap Home Insurance Coverage
Now we will look at various ways to save on your home insurance coverage and get a low premium. There are various factors that affect your home insurance cost. By making your home less likely to suffer damage from theft, fire, flood and any other mishap, you can decrease the chances of any claims happening, which in turn reduces the cost of your coverage. Without a further ado let's dive in into what you can do to pay less for your homeowners plan.
Tip #1 Look around
Invest some time in the pursuit of the best deal from the most trusted and reliable home insurer. Ask friends for advice and also flick through the Yellow Pages to find insurers in your state. Alternatively, you could log into the National Association of Insurance Commissioners’ website. Here, you will find relevant information which will assist you in choosing an insurer near you.
Additionally, check out these insurance services on their consumer guides. These guides will give you the price ranges thus you can be able to figure out which companies have cheaper home insurance policies. However, as we discussed earlier, the price shouldn’t be the only factor that you consider. A good idea would be to talk to different insurers to get a feeling of their products. Also, ensure that you ask about how they can lower your costs.
Do background checks on these companies to find out about their financial stability. All through this process, you will be eliminating prospects. When you get down to three insurers, ask for their price quotes.
Tip #2 Increase your deductibles
Deductible is the money that you need to pay upfront before the insurer can pay for your claim. Generally, the more money you put into your deductibles, the smaller the monthly premium fee. These days, insurance companies are even allowing deductibles at $500, but if you decide to go with $1000 instead, you could save as much as 25%. It is important to note that if you live in a disaster-prone location, your policy might have damage specific deductibles.
Tip #3 Do not mistake the buying cost of the house for the rebuilding costs
You have to remember one thing. The land your house is sitting on cannot be stolen or burnt down. When you buy the house, you of course pay for this land. Remember that the cost of rebuilding is going to be lower than that of buying hence including its value in the insurance policy will see you pay higher premiums.
Tip #4 Your vehicle and home insurer should be the same
There are insurance firms that will take a percentage off your premium if you buy more than one policy from them. You just have to be careful and ensure that the combined price is lower than purchasing the policies separately.
Tip #5 Disaster-proof your house as much as you can
The more your house is at risk of getting destroyed by a disaster such as a windstorm, the higher you will pay for your premiums. To avoid these costs from accumulating, it is wise to invest in making your house as disaster resistant as possible. Talk to your company and ask them about the methods that you can use to fortify your house. You will save a lot on your premiums by installing storm shutters and reinforcing your roof. Older homes should undergo a retrofit to make them able to better resist earthquakes. Additionally, consider making your electrical, heating, and plumbing systems more modern to avert the risk of water damage and fire.
Tip #6 Upgrade your security
Just for having a smoke detector, dead-bolt locks, and burglar alarm, you could get discounted at least 5%. Some firms will even offer to cut 15-20% off your premium if you have the advanced fire and burglar alarm that contacts the police and firemen or a sophisticated sprinkler system. These installments don’t come cheap either but could go a long way in saving the amount you spend on premiums. Therefore, to be on the safe side, before you purchase these systems contact your insurers and ask what they recommend, how much you would save on the premiums, and the cost of the devices.
Tip #7 Check for other discounts
Homeowners insurance discounts come in various shapes and sizes across the states. Ask your insurer which type of discount that you are eligible for. Factors that normally come into play when a discount is considered include smoking status, age, longtime customers, and membership to certain professional institutions.
Tip #8 Have a good credit record
A clean credit history can go a long way in getting you into the insurer’s good books. When the credit history is solid, they can cut your insurance costs. Additionally, are now using credit information as a basis of merit when determining how to price you. It will do you good to protect your credit record by paying your bills on time and keeping your credit balance as low as you can. Also, make it a habit to check your record to ensure it remains error free.
Tip #9 Stick with your insurer if they serve you well
The longer you stay with an insurer, the better the deals that they will serve you. Staying with the same insurer for over six years could get your premiums cut by 10%. This does not mean however that you should let a good deal from their competitor pass you by because you were being loyal. Play your cards right and periodically ‘hunt’ for better deals.
The insurance policy that you get shouldn’t be a cheap homeowner’s insurance necessarily because at the end of the day you want to be sure that your property is protected adequately. Cheap might not do the trick but learning how to cut on these costs could come in handy at seeing you save more.