People want to get the best value for the things they pay for. The same holds true when it comes to home insurance costs. Unfortunately, many people are not aware that they are paying more for insurance than they should. Here, we will list the most common reasons why you are paying too much for home insurance.
Table of Contents
1. Coverage amount
It makes sense that the higher the coverage amount, the higher the premium. For instance, a policy that covers a $250,000 worth of property will surely cost more than one that covers a property worth only $150,000. To save on insurance costs, it’s important to determine how much your property is worth.
2. Unnecessary home insurance riders
A rider, also known as an endorsement, is an optional add-on to your insurance policy. Some examples are artwork, antiques, and jewelry riders. Having additional coverage is good, but pay attention to riders that you may not need. Unnecessary riders will result in a higher premium.
3. Setting deductibles too low
The deductible amount has a direct effect on premium payments. The higher the deductible, the lower the premiums. But before making any quick decisions regarding this matter, take time to consider what increasing the deductible can mean. While a higher deductible can reduce your premium payments, you shouldn’t increase the deductible higher than what you expect to pay out of your own expenses if the need arises.
4. You’re not aware of discounts
Don’t forget about discounts when getting home insurance. For instance, if you have added a home security system or availed of multiple insurance policies coming from the same company, you may be eligible for discounts on your insurance. We all love discounts as they allow us to buy a product or service at a lower price. Be sure to talk to your agent to see if you are eligible for such discounts.
5. House size and features
Generally speaking, the bigger your house, the more expensive it is to insure. Additionally, if your home is made of more expensive materials (e.g. roofing or siding), the insurance cost will typically be higher.
6. Age of the home
Older homes may be more vulnerable to damage due to wear and tear. For this reason, insurance companies usually offer lower premiums for newer homes.
If you have pets like a Rottweiler or a Pit Bull, there’s a possibility your insurance will be affected. Same goes if your pet has a history of biting people. It may be challenging to get claims related to accidents involving such pets.
8. You didn’t get an umbrella policy
Umbrella policies give you broader protection and can help bring down premium costs. They can provide home and automobile coverage. Basically, they can be used for property damage or injury liability claims that go higher than standard homeowners or auto insurance policies allow. Look into an umbrella policy together with a reduction in coverage amounts to get the best value for your money.
9. Credit score
Insurance companies have noted that homeowners with higher credit scores tend to be more responsible with their property. Hence, those with higher credit scores can get lower premiums when compared to those with low credit scores.
10. Insurance company itself
Since insurance companies have different overhead costs and use different metrics to price their insurance products, the price for the same insurance policy may be different from company to company. But aside from the price, you also have to consider other factors such as levels of service and reputation. The problem is, you don’t know how good an insurance company is until you have to make a claim. Researching online will help you find out more about a particular insurance company.
While it’s really important to have home insurance, you don’t want to pay more than what you really need to. You can enjoy lower insurance costs if you take note of these reasons you are paying too much for home insurance. Although there are some factors that you can’t change, there are items on this list that you can consider to reduce your premium for home insurance.