One of the easiest ways to lower your home insurance premiums is to raise your deductible. Your deductible is the amount of money that you have to pay out of your own pocket before your insurance company pays for the rest of a covered claim.
For example, suppose you have a home insurance policy with a $500 deductible and your neighbor has a policy with a $1,000 deductible. If both of you suffer $5,000 worth of fire damage to your homes, you would have to pay $500 and your insurance company would pay $4,500. Your neighbor would have to pay $1,000 and their insurance company would pay $4,000.
By choosing a higher deductible, your neighbor pays less for their monthly or annual premiums. However, they also take on more financial risk in case they need to file a claim.
Before you decide to increase your deductible, make sure you have enough savings to cover the higher out-of-pocket costs. Also, check how much you would actually save on your premiums - sometimes raising your deductible by a small amount does not make a significant difference on your rate.
When you shop for home insurance, compare different quotes and deductibles from different companies. You may also want to bundle your home insurance with other policies or add extra coverage like flood insurance to get more discounts.
If you have any questions about how to save money on home insurance, feel free to contact us!
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