Are you looking to reduce your property insurance costs?
You are not alone as many homeowners feel the pinch of ever-increasing insurance premiums.
While it may seem like a necessary burden, it is important to get your home insured, especially in disaster-prone areas like Florida.
Before diving into our practical tips for saving on property insurance, let’s take a moment to review some statistics that highlight just how much these costs have been climbing.
The Climbing Cost of Property Insurance
The nationwide property insurance rate has increased since the last quarter of 2017. From 2017 to 2022, the cost of homeowners insurance went up 40% faster than inflation.
Right now, the average cost for homeowners insurance each year is between $2270 per year, though it varies by location. These high costs make it hard for many families to pay their mortgage, which can be especially tough for first-time homebuyers.
In 2023, only 88% of homeowners had insurance, and about half of those without insurance made less than $40,000 a year. When natural disasters hit, those without insurance often depend on federal aid to fix or rebuild their homes. A survey in May 2024 found that about 40% of homeowners saw their insurance costs go up or had trouble getting coverage in the past year.
Many people are finding it hard to afford their insurance. Some people are even having trouble finding insurance at all. This is especially true in places like Florida, where there’s a high risk of hurricanes, floods, and other natural disasters.
So, How to Cut Down on Your Property Insurance Cost
Shop Around for the Best Rates
Comparing quotes is one of the best methods to get your insurance prices down. In the long term, it can save you a great deal of money, even though it can take some time.
Start by asking your friends for recommendations, checking the Yellow Pages, or contacting your state’s insurance department. The National Association of Insurance Commissioners (NAIC) also provides useful information to help you choose an insurer in your state.
When comparing insurance companies, don’t just focus on price. Find a company that offers affordable life insurance without sacrificing quality.
Check their financial strength using ratings from companies like A.M. Best or Standard & Poor’s. To get the best deal, compare quotes from at least three insurers.
Raise Your Deductible
Comparing quotes is one of the best methods to get your insurance prices down. In the long term, it can save you a great deal of money, even though it can take some time.
A deductible is the amount of money you must pay out before your insurance starts to cover losses. By raising your deductible, you can lower the price of your insurance.
A $500 deductible is the minimum that most insurance providers advise, but if you can afford to increase it to $1,000, you might save as much as 25% on your premiums.
But be aware that your insurance policy can have a different deductible for certain types of damage, such as windstorms or earthquakes if you live in a region that is prone to disasters.
Bundle Your Home and Auto Insurance
Purchasing both your auto and house insurance from the same provider is another method to save money.
If you purchase multiple policies from an insurance company, they may give you savings ranging from 5% to 15%. Just make sure that the combined price is lower than what you would pay if you bought the policies separately from different companies.
Make Your Home More Disaster-Resistant
Reducing the risk of natural disasters might also result in cheaper insurance.
Find out from your insurance agent what safety measures you may take for your house. By installing storm shutters, strengthening your roof, or switching to stronger roofing materials, for instance, you may be able to lower your premiums.
If you live in an area prone to earthquakes, consider retrofitting your home to withstand them better.
Modernizing your electrical, plumbing, and heating systems can also lessen the chance of a fire or water damage, which could result in a reduction in your insurance costs.
Improve Your Home Security
You can lower your insurance costs by strengthening the security of your property. You can reduce your insurance costs by at least 5% by installing deadbolt locks, smoke detectors, or burglar alarms.
If you install a sophisticated sprinkler system or a fire and burglar alarm that notifies the police or fire department, some companies will give you even greater discounts—up to 15% or 20%.
However, these systems can be expensive, so check with your insurer to see what kind of system they recommend and how much you’d save before making any purchases.
Seek Out Other Discounts
Insurance companies often offer various discounts, but they may not be the same in every state.
For example, if you’re at least 55 years old and retired, you might qualify for a discount because you’re home more often, which reduces the risk of burglary and allows you to spot fires sooner.
Some employers and professional associations also offer group insurance programs that might be cheaper than what you can find elsewhere. Be sure to ask your insurer about any discounts you might qualify for.
Maintain a Good Credit Record
Your credit history can affect your insurance costs, as many insurers use credit information to determine the price of homeowners insurance policies.
To lower your insurance premiums, pay your bills on time, avoid excessive debt, and keep your credit card balances low. Regularly review your credit report for any mistakes and fix them quickly.
Skip Small Claims
It might be tempting to file a claim with your insurer for minor damages, but it could be more cost-effective to pay for small repairs out of pocket. Some insurers offer discounts if you remain claim-free for a certain period, usually a few years.
Filing a claim, even for something small, can raise your insurance rates. For example, submitting a claim for wind damage can increase your annual insurance cost by about 9%. Paying for minor repairs yourself could end up saving you more money in the long term.
Stay with the Same Insurer
You may be eligible for a loyalty discount if you’ve had your insurance from the same provider for several years.
Some insurers offer a 5% premium reduction after three to five years of service, and a 10% reduction after six years or more. Still, it’s a good idea to periodically check rates to be sure you’re getting the best value.
Check Your Policy for Construction Materials
Insurance companies offer different rates based on the construction type and occupancy of your building. For instance, buildings made with fire-resistant materials like concrete often get lower rates.
Double-check that your insurance company has the correct information about your building materials and occupancy. If they’ve made a mistake, it could be costing you more money.
Don’t Install “Risky Things” You Don’t Use
Certain items on your property, like trampolines or swimming pools, can increase your insurance costs because they pose a higher risk of injury. If your kids have outgrown the trampoline or if your pool is no longer being used, consider getting rid of them.
Removing these items or adding protective features like a fence can lower your insurance rates. To find out how much you could save by implementing these changes, get in touch with your insurer.
Last but not Least—Review Your Policy Regularly.
Stay on top of your insurance needs by reviewing your policy at least once a year. Avoid paying for coverage you don’t need, but ensure your policy is up-to-date for any significant changes in your life or property.
For example, if an expensive item you insured has decreased in value, you might want to reduce or cancel the extra coverage and save some money.
By following these tips, you can lower your property insurance costs and still have the coverage you need to protect your home. Make sure that you are properly covered in case something unexpected takes place. To find property insurance at lower rates, get in touch with our insurance experts now.
