Understanding Insurance Policies

Posted on: 18 July 2023

If you have found yourself struggling to keep up with the cost of your homeowners insurance payments, you should know that there are steps you can take to potentially lower the cost of this coverage. In fact, you will want to consider completing these steps even if you are relatively happy with your current rates. After all, any money you can save on essential services such as homeowners insurance is money you can then choose to invest in other areas of your life. 

#1: Raising Your Deductible

It is quite common for homeowners to hesitate when it comes to raising their deductible even though this will result in lower insurance premiums. Typically, this hesitation is because homeowners worry that they will spend more in the long run when covering the higher deductible. If you share this concern, you should know that most homeowners will still save money in the long run even if they do need to pay a higher deductible when filing a claim. This is because most homeowners do not file insurance claims on a regular basis. Consequently, the amount of money they will save each month after raising their deductible will add up to significantly more than the slightly higher out-of-pocket cost associated with having a higher deductible. For example, if you saved $10 a month by raising your deductible by $100, you would still save $20 a year even if you filed an insurance claim during that year. 

#2: Decreasing Your Risk

Insurance companies utilize complex algorithms to help them determine how much to charge each person for their coverage. These algorithms are designed to assess just how much risk the insurance company is taking on when underwriting a specific policy. The less risk that is involved, the cheaper the associated coverage will be. Taking action to decrease risk factors associated with your home can result in savings on your homeowners insurance. For example, you can choose to install a home security system or a fire suppression system.

#3: Evaluating Your Coverage

Your insurance needs can change dramatically over the years. If you have just been renewing your insurance policy over and over again, you may be carrying more coverage than you truly need. That is why you should always take the time to sit down with a qualified insurance professional to evaluate your insurance needs each year before your homeowners insurance policy renews. This insurance professional may also be able to help you discover additional ways in which you can lower your monthly premiums.

For more information, contact a homeowners insurance provider near you.