High Homeowners Insurance Premiums? 10 Factors You Can Control for Lower Rates

Today’s uncertain economy is putting a strain on many homeowners when it comes to meeting monthly bills.  As a result, they are under financial pressure and need to cut costs wherever they can.  If you’re one of the many Americans who feel the crunch, it may be possible to make some changes to your  policy that will reduce homeowners insurance premiums.

If you are considering this course of action, talk to your agent to make sure you aren’t risking major policy gaps by doing so.  Slashing your homeowner’s insurance premium could leave you without adequate coverage if a catastrophe strikes.

How to Reduce Homeowners Insurance Premiums

Here are 10 things that can jack up your homeowner’s insurance premium and some suggestions on what you can do about them without compromising coverage:

1.  Your insurance deductible is too low.

Homeowners Insurance PremiumsDid you choose a low deductible because it means you’ll pay less out-of-pocket in the event of a claim?  The downside is that your premium will be higher.  If you don’t have a substantial emergency fund for home repairs, a low deductible is fine.  But, if you can cover some of the repairs costs yourself and opt for a higher deductible, your monthly homeowner’s premiums will be lower.

2.  Your neighborhood is in a high-crime area.

Insurance rates vary by neighborhood.  Insurance companies predict crime rates by determining how much they’ve paid for claims due to burglary, crime, and vandalism in the area.  If you live in a high-crime area, your homeowner’s insurance costs will be higher.  

Installing a home security system is the best way to help bring down your premiums enough to make it worth the cost of the system.

3.  Your home is located in a flood zone.

If you live in a flood zone, there’s no getting around having flood insurance.  The National Flood Insurance Program (NFIP) regulates flood insurance.  On average, NFIP policies cost about $700 a year. This is a standard rate that won’t change. 

You can buy private flood insurance that may offer more coverage in high-risk areas. The downside is that a private company may increase its rates after the first year.

4.  Your home is getting older.

The overall age of your home has a huge impact on your homeowner’s insurance premium.  Also, the age of the HVAC, roof, plumbing and electrical system will have an impact on the premium as well.  A home that is 50 years old will have an average of 3% higher insurance rates compared to newer homes.

You can reduce the costs of insurance by installing a new roof and updating the aging plumbing and electrical systems.  Your premiums could be lowered by 5% to 20% if you do this.

5.  You have a low fire suppression rating.

What is a fire suppression rating?  It is based on how close your home is to a fire station or a fire hydrant.  If your home is close to one or the other, you’ll pay less for insurance.  Being near a permanently staffed versus a volunteer station will help you save even more.  

If you aren’t sure about your home’s proximity to a fire station, an insurance adjuster can help you find out what the rating is for your area.

6.  Your credit score is poor.

Your credit score influences your homeowner’s insurance premium.  It lets the insurance provider know whether you are likely to pay on time.  If your score is poor, it demonstrates that you may be likely to engage in risky home behaviors that result in filing a claim.  Poor credit history can cause your insurance premium to be 30% higher than someone with a good credit history.

Try to clean up your credit history by paying down balances, settling any debts that are in a collection, and don’t take out new loans.  As your credit score improves, you can have your insurance policy reviewed for potential savings.

7.  You don’t check your policy regularly.

Like many homeowners, you pay your premiums online and don’t think about the policy unless you need it.  This can be a mistake because your insurance can go up without you realizing it.  

By checking your policy regularly, you will be aware of changes and can talk to your agent about ways to save.  Or, you can cancel the policy if you find a better deal with another company.

8. You have too much coverage.

Getting the right amount of homeowners insurance can be tricky.  You can’t let sentimental value cloud your judgment and cause you to have more insurance than you need.  

Typically, your coverage should equal what it would cost to rebuild your house at current construction costs.  This is known as replacement value insurance.  Insuring the home for more than the replacement value will cause higher premiums.

9.  You have a swimming pool.

In areas where pools are the norm, your annual insurance premium can be $50 to $75 higher.  Some insurance companies don’t even insure home pools that have diving boards or water slides.  

If you have a pool, add some safety measures.  For instance, add a fence around the pool and get rid of the diving board to save money on your premiums.

10.  You switch insurance companies too often.

Switching insurance companies every year to get cheaper rates?  This may help for a while, but you could be losing money in the long term.  

If you stay with the same company for five years or more, you may be eligible for a loyalty discount.  Typically, these discounts reduce your premium by about 5%.

Sandifer Insurance Can Help You Find Affordable Homeowners Insurance Premiums 

If you are interested in finding affordable homeowners insurance, Sandifer Insurance Agency can help.  We have 40 years of experience in helping homeowners get the coverage they need without paying excessive rates.

Reach out to Sandifer Insurance by phone, email, or online to learn more about how to lower homeowners insurance costs.


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