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Congratulations, you are a homeowner! If you financed the purchase of your home with a mortgage loan, you must carry homeowners’ insurance. Lenders won’t approve you for a mortgage loan if you don’t have an active insurance policy.
The cost of your homeowners’ insurance policy will vary, depending on your home’s location, size, age and other factors. Bankrate, though, reported that the average cost of this type of insurance in the United States stands at $1,428 a year for a policy that offers $250,000 in coverage.
These policies pay out if your home is damaged or destroyed by a natural disaster. You’ll also receive a payout if there is a theft in your home or if someone is injured on your property and sues you for medical costs or other damages. Policies typically cover other structures on your property, too, such as sheds and garages.
Some of the factors that go into the cost of your homeowners’ insurance policy are out of your control. You cannot do anything about your home’s age or location. You cannot change your home’s style or do too much about its size — all factors that impact how much you pay each year for coverage.
You can, however, take other steps to help reduce your homeowners’ insurance bill. Consider taking these actions to reduce this expense.
Consider a Security System
One of the easiest steps is to purchase a home security system. By investing in such a system, you reduce the odds that a burglar will break into your home. This also reduces the odds that your insurer will have to pay out to replace stolen items from your residence. Some security systems include monitoring for fire. Once you provide proof to your insurer that you’ve equipped your home with a security system, your insurance rate should dip.
Quit Smoking
Smokers pay more in homeowners’ insurance because they are riskier: There is more of a chance that their residences will be damaged or destroyed in a fire. If you stop smoking, your insurer will drop your insurance rate.
Protect Your Home from Natural Disasters
Insurers will lower your premium if you take steps to boost your home’s protection against severe storms, earthquakes or other natural disasters. You might lower your cost of insurance by installing storm shutters, reinforcing your roof or replacing your existing roof with one designed to withstand hail and strong winds.
Pets
Insurance companies will likely ask you questions about pet ownership. Various breeds of dogs cause the risk factors to increase in the eyes of insurers. Consider what type of pet you are going to own, and the possible increase in premiums should the company agree to issue a policy.
Bundle Home and Auto
Many insurers offer discounts if you purchase both your auto insurance and homeowners’ insurance from them.
Watch Your Credit Score
Many insurers will check a version of your credit score when setting your policy’s annual premiums. That might sound surprising, but insurers say that homeowners with stronger credit scores tend to file fewer claims. That makes them safer to insure and allows insurance companies to offer them lower rates.
Review Your Insured Valuables Coverage Annually
Maybe you sold an expensive diamond ring last year. Or maybe you no longer own that rare piece of art. If so, let your insurer know. You might not need as much coverage for the items inside your home over time. Reducing this coverage will lower your overall property insurance bill. All policies have schedules that place a cap on the amount of insurance coverage for particular categories of personal property. An insured can always seek to increase that coverage to reflect the appraised value of the asset.
Final Thoughts
No one likes to pay more for their insurance. However, at the time of loss you will be grateful that you insured yourself properly and are being compensated for the losses you sustained in full.
Do you have questions?
Count on your experienced team at Ericson, Scalise & Mangan, PC to provide you with sound guidance for your Estate Planning, Elder Law, Real Estate, Probate, Trust & Estate Administration, and other legal needs. For assistance, contact us today at (860)854-3809, or email us at info@esmlaw.com.
