How your location, choice of remodeling projects and even your pet can drive up coverage costs -- and how to keep them down.
What is it about home insurance that makes us tend to ignore it — and its price tag? It’s a common oversight that can end up costing needless hundreds or thousands of hard-earned dollars.
Perhaps the reason many of us make this misstep is that we mistakenly believe there’s little we can do to influence the price of our homeowner’s insurance policy. It’s true that there’s not much you can do about neighborhood crime rates, the region’s propensity for cataclysmic weather and other factors that impact rates.
But many of us don’t realize there are choices we make that directly determine at least part of our homeowners’ insurance cost. Consider these choices and lifestyle preferences that can save you money or cost you big.
1. Shop around
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It’s easy to assume that all insurance companies will charge the same rate to insure a home. That’s a misconception that results in many of us overpaying. A review conducted by Bankrate found rates to insure a Chicago home varied by 121 percent among four insurers.
Three insurance companies offered quotes that differed by 67 percent for a Roanoke, Virginia, home. Home insurance in other locales followed similar patterns. Michael Barry of the Insurance Information Institute, an industry organization, told Bankrate that insurers weigh risk factors such as building costs differently. Shopping around can greatly impact your bottom line.
One convenient place to start comparing insurance plans and pricing is right here in our Solutions Center.
2. Bundle your insurance
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When shopping for the best rates on homeowner’s insurance, don’t forget to contact your auto insurance company. Some insurers offer a 5 to 15 percent discount to clients who have multiple policies with them, according to the Insurance Information Institute (I.I.I.). There’s no guarantee your insurer makes this offer, but it’s worth asking. Another tip: Ask your long-time homeowners’ insurer if you are eligible for a better rate. I.I.I. reports some insurers offer a 5 percent discount to customers that have worked with them for three to five years, and up to 10 percent for customers who’ve been with them for longer periods.
3. Consider insurance when house shopping
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Insurers factor in a home’s age, construction and even proximity to the nearest fire department when determining home insurance rates, according to Insurance.com. It’s also vital to understand the cost of rebuilding a home at today’s rates. If it would cost a lot to replace or repair, factor those increased costs into the rates you expect to pay. Allstate spokesman Justin Herndon gave these examples:
It’s possible that an older home may cost more to insure, as the materials [and] features in older homes can be more costly to repair and replace, things like plaster walls, ornate moldings, stained-glass windows, hardwood floors.
4. Consider a potential new home’s location
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It’s not about the view, unless the view is of a fire station. The closer you are to the nearest fire department, the less you’ll likely pay for home insurance, Insurance.com notes. That’s especially true if you live near a station that has 24/7 coverage. That means a station staffed by professional, not volunteer, firefighters. Nearby fire hydrants also favorably impact homeowner’s insurance rates. If you opt to live in a rural area away from firefighters and equipment, expect to pay extra insurance premiums.
5. Keep your roof in good order
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Many of us don’t give much thought to our homes’ roofs, but insurers do. Tell your insurer if you repair or replace your roof. Your policy may cover some of the cost or you may be eligible for lower premiums, according to Allstate’s Herndon. After all, a new roof will better protect the rest of your house and belongings.
6. Think twice before installing extras
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One of the great things about owning a house is that you can personalize it to suit your interests and lifestyle. Yet a swimming pool, hot tub, trampoline or other backyard extra can boost your insurance rates. If someone uses these recreational features — even without your OK — and is injured, you could be liable, reports Wells Fargo. If you do opt for such high-risk extras, consider adding netting around a trampoline, locking covers on the pool and other security measures to decrease the risk of mishaps.
7. Consider your dog’s background
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About half of dog bites occur on the owner’s property, and they total about one-third of home insurance liability claims, reports Wells Fargo. Talk to your insurer before you adopt a new four-legged friend. And be aware that, whether or not you think it’s fair, some insurers will not cover you if you have certain breeds. Insurancequotes.org offered a list of 10 breeds of dogs that may set off insurers’ alarms, topped by — you guessed it — pit bulls, Dobermans and Rottweilers.
8. Don’t go wild with remodels
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Sure, it’s fun to jump into home improvement, but don’t spend too much or you could mar your credit and boost your insurance rates. More insurers are keeping an eye on their clients’ credit in determining rates, the I.I.I. says. Remember, too, that remodeling may add value to your home that will also increase your rates. Even if you don’t remodel, spend moderately and, of course, make payments on time.
9. Update wisely
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Talk to your insurance agent about ways to protect your home that might reduce your premiums. Updating utilities, adding storm shutters and installing other weather protection can go a long way toward saving you insurance costs. If you live in a hurricane or flood zone, you likely already know that you pay a higher insurance rate but it’s wise to discuss actions you can take to reduce them.
10. File claims judiciously
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Sure, you buy homeowner’s insurance so you are protected. But that doesn’t mean you should routinely file claims. “There’s a significant correlation between claims that are made and future additional likelihood of claims being made,” Chris Hackett, senior director of personal lines policy at the Property Casualty Insurers Association of America, told Insurance.com. Basically that means that your claim history will follow you to new homes and may cause insurers to offer higher-than-expected quotes. Use insurance as needed, but try not to overdo it.
What’s your experience with homeowner’s insurance? Any surprise price increases or savings? Share with us in comments below or on our Facebook page.