Find Affordable Homeowners Insurance

Negotiating homeowners insurance

Is Homeowners Insurance Negotiable?

To help protect one of your biggest investments, lenders will require you to purchase a home insurance policy before the closing proceeds and it’s not negotiable if you have a mortgage. If your mortgage is paid off, you are not required to have homeowners insurance, but it is still highly recommended to protect you financially.

Insurance agents won’t give you the best rate automatically if you do not negotiate since they receive a higher commission when they are able to sell you pricier insurance coverage. They will try to offer you the most expensive policy they have so they can get higher incentives. That is why you have to be vigilant and prepared when negotiating. However, most insurance agents are willing to bargain so they can work with you for a long time because if you do not renew your policy, they won’t get any commissions.

It’s important to know what you want

One of the major mistakes when choosing for homeowners insurance is that most of the time, people are just following what type of policy is recommended by their insurers and not deciding for themselves. Yes, they can help you find what is the best policy when you’re shopping but knowing what’s the most important and what your preferences are when it comes to protecting your personal belongings and your home, will go a long way to make sure that your insurer will be considering all your needs. So, before talking directly or shopping for home insurance, you should have an idea of the limits and coverages that you want. Here are some of the things that you should know:

  • Location
  • Safety and security features
  • Square footage of your home
  • Distance from hospitals, fire stations, and others
  • Age of your home
  • Types of coverage that you want
  • High-value items
  • Value of your personal property
  • Desired coverage limits

Do your homework

Before meeting with your agent to discuss your policy, you should do your homework first. Every state has an insurance department that monitors insurance companies, so check your state government website first since they have available information that can help you with your negotiation. For instance, the Colorado Division of Insurance made a comparison about home insurance premiums named “Homeowners Insurance Interactive Premium Comparison Report” that helps homeowners to compare the premiums being offered in the state. They surveyed the premiums of each policy type and its corresponding coverage limits.

Other than that, you should also get accurate home insurance quotes because the rate for the same insurance coverage can vary among insurers. You can do this by providing the same information to different insurers when asking for quotations. Make a list that contains all the considerations mentioned above.

How To Negotiate

Now that you already know what you want and compared insurance premiums and coverage among your options, it’s time for you to negotiate and make your premium lower. In order to have lower insurance quotes, here are some tips to help you negotiate with the agents:

1. Increase your deductible

You can save more money on your premiums if you have a higher deductible. This is the amount of money that you have to pay towards a loss before the insurer pays your claim. You can save as much as 25% if you can afford to increase your deductibles for up to $1,000. If you’re living in areas where disasters are prone to happen, insurance policies may have a set deductible for each type of damage.

2. Purchase a bundled insurance

You can save up to 15% off your premium if you purchase a home insurance policy together with your auto or life insurance.

3. Improve home security

Install fire and smoke alarms in your home to get some discounts. Other than that, you can also put sprinkler systems, burglar alarm, and deadbolt locks.

4. Make your home disaster-proof

Make your home more resistant to natural disasters and hailstorms. Buy strong roofing materials and add storm shutters to have discounts on your premium. Modernize your electrical wirings, plumbing, and heating as well.

5. Shop for different options

Look for options on three to four different home insurance companies and compare their rates. Look for some insurance packages that can give you big savings.

6. Have a good credit rating

A good credit rating is always essential when purchasing home insurance. You can cut insurance costs if your rating is good to pay your bills on time, keep your balance low, and don’t obtain more credit than you need.

Final Thoughts

By securing the best rate, you can get the most out of your home insurance coverage. Always get advice from insurance agents when you’re shopping around. It also helps to do your own research before purchasing home insurance. Insurance rates can be changed easily. Know your options to have more leverage in finding ways to lower your insurance costs and to make sure you have all the coverage you need.

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