Let’s face it. Who doesn’t love a good discount? A good discount is like icing on the cake. The cake’s still perfectly yummy to eat but the icing adds that extra-delicious brilliance to it! And when discounts are offered on financially taxing services like insurance, it’s like having two whole cakes and double the icing!
Home insurance companies offer discounts that could save you quite a few hundreds of dollars. However, these discounts may not be widely publicized and could take quite a bit of research and careful planning to make the best use of. Luckily, we give you all the information you need to know to utilize these discounts, letting you hit the proverbial two birds with one stone. You get sufficient coverage and save your dollars!
Table of Contents
- 1 The Various Types of Home Insurance Discounts
- 1.1 Home and Auto Bundle
- 1.2 First-Time Customer
- 1.3 Loyal Customers
- 1.4 Being Claim-Free
- 1.5 Automating Payments
- 1.6 Paying Your Dues In Full
- 1.7 Retirees
- 1.8 Signing Up For A New Policy Before the Expiry Of the Current One
- 1.9 Raising Your Deductible Discount
- 1.10 Home Security System
- 1.11 Renovation Or New Construction
- 1.12 Personal Factors
- 2 In Conclusion
The Various Types of Home Insurance Discounts
Though discounts can vary from company to company, there are some discounts that are the industry standard, such as:
Home and Auto Bundle
Remember in economics class when you were taught about “economies of scale”? Well, this is a similar concept because insurance companies tend to give discounts when you buy insurance policies in bulk! Therefore, for example, if you insure your vehicle, house and property individually or under an umbrella insurance policy with the same insurance company, you could get anywhere between 15-35% off on your policy or policies (with an average of 20%) depending on the insurance provider. These discounts, also called “multi-policy discounts”, are great because they’re mutually beneficial; you give the insurance companies more business and because of that, they give you discounts!
If you’re planning to switch your insurance provider, you could end up getting a discount of up to 10% from the new provider. However, these discounts are limited period offers, so ensure you’re not tempted into switching insurance based on the discount alone.
Just as new customers get discounts, so do old ones because loyalty definitely deserves a reward! Loyal customers of a particular insurance company can get up to 10% off on their policies, provided you’ve been free of claims for a designated period and are in the company’s good books!
If you read the last point, you’re probably wondering what it means to be free of claims, or “claims-free”. To clear up the air of curiosity “claims” refer to the compensation that your insurance company provides to you in case of an accident or damage, provided it is covered by your policy. However, though this may make you feel better, it doesn’t make your insurance provider feel better because claims are typically viewed as losses or liabilities by insurance companies. Therefore, being claims-free for a certain period of time (such as 5 or 10 years) can earn you a discount of up to 20%. Ensuring you don’t just file claims for every small damage could end up with you saving more in the long run than the amount of compensation you’ve received (for claiming small damages)!
Let’s be honest. Physical cash is on the verge of being obsolete, at least as far as business is concerned. Similar to many schemes issued by credit card companies, insurance companies also offer discounts to you if you’ve set up a system of automatic payments so that your premium is paid directly through your bank account.
Paying Your Dues In Full
Many insurance companies offer you the option of paying your insurance bills in installments. However, paying the amount in one shot can earn you a discount of up to 5%, as it earns you the company’s goodwill.
Retirees, who are over the age of 55, can enjoy discounts from insurance companies as the latter rations that the former will spend the majority of their time at home and can, therefore, spot or avert any accidents before they blow up into big events resulting in big claims. And we all know how insurance companies feel about claims! Thus, retirees can enjoy a discount of up to 10%.
Signing Up For A New Policy Before the Expiry Of the Current One
Signing up for a new policy before your current one expires can earn you a discount of up to 10%, as this ensures your insurance provider of your continued loyalty to them.
Raising Your Deductible Discount
Deductible refers to the amount of money that you, as a policyholder, will have to pay in case of an accident or damage before your insurance company steps in and compensates you. Raising this amount from $500 to $2000 can save you up to 16% on your insurance policy.
Home Security System
Home security systems are one of the influencing factors that insurance companies consider when offering you a quote on your policy. Turns out that home security systems also result in discounts and up to 20% at that. Having a really good alarm or security system installed in and around your house means that there’s a reduced risk of theft or fires or other accidents, which presents a lower risk of claims to your company. The lower the risk, the lower the premium, explaining why insurance companies offer discounts for home security systems.
Following the same logic, homes in gated communities or highly secure neighborhoods, or belong to a neighborhood watch or homeowners’ association, are also offered discounts between 5% and 20%.
Renovation Or New Construction
Renovating your house, such as building a new roof or installing better electricity and plumbing systems, can earn you discounts. Installing a “class 4” roof or a “Leadership Energy Environmental Design” home plan can earn you up to 10% as a discount. Additionally, if your house is newly constructed, you could save up to 30% as a new house means lesser chances of accidents or damages, such as pipe bursts and wiring malfunctions.
That’s right, your personal history could make a difference in the amount of premium you pay. Being a non-smoker and married or widowed can earn you up to 15% and 5% discounts, respectively. The reason behind the first one is that you’re less likely to start a fire or related accident, while the latter is believed to be an indicator of your stability in life and also means that you or spouse will likely be present in the house and can prevent accidents.
Now that you know the many ways in which you can earn discounts, make sure you utilize them! The best time to ask for discounts is at the time of renewing your policy or signing a new policy and always ensure that you’re getting the discount you deserve.
Also worth mentioning is the fact that insurance companies generally put a cap on how much discount you can enjoy, so don’t make too many calculations yet! Generally, the limit is set at 25%, so make sure you consider the final premium amount you’re paying rather than going by discounts alone.
Ultimately, make sure you aren’t enticed by discounts alone to stay with your current insurance provider or policy. Put in some research; it’s worth it to watch your savings grow.