As a homeowner, the amount you should expect to pay on homeowners insurance will depend on the location of your home. If you live in an area more prone to disaster, for example, your insurance will be more expensive. The purpose of this type of insurance is to cover any and all possible damages to your home and the things you keep inside, so the first premium is typically paid at closing. Although homeowners insurance is a necessary cost for protecting your home, there are several ways to mitigate how much you spend each month. The following are our tips on how to reduce the cost of homeowners insurance:
- Raise your deductible: A deductible is the amount of money you pay toward a loss before your insurance company covers a claim. With a higher deductible, you have the opportunity to save more on your insurance premium.
- Look into buying your home and auto policies from the same insurer: In some cases, insurance providers will take a certain percentage off your premium if you buy two or more policies from them.
- Routinely review the limits of your policy and value of your possessions: Although you want your policy to cover any additions to your home, you don’t want to overpay for insurance. Make sure you aren’t funding any floaters, or extra insurance for items that are not covered by standard home policies like expensive jewelry or art.
- Consider the location and condition of your home: You may qualify for reduced homeowners insurance if you live near a fire hydrant or fire station (professional not volunteer). It could also be slightly cheaper if your home’s electrical, heating and plumbing systems are all less than 10 years old.
Although homeowners insurance covers the majority of damages, it’s important to remember that it does NOT account for destruction caused by flooding, earthquakes, and poor maintenance. You must purchase separate policies to be covered by such destruction. For more information about homeowners insurance, or to learn more about transitioning into homeownership, contact one of our mortgage specialists and download our eBook today.