For the basics on how to lower your home insurance rates, it helps to understand that insurance providers calculate premiums based on certain risk factors. The following Q&A defines the most common risk factors and what steps you can take to eliminate, or at least lessen, their impact on your premiums.
What Is a Home Insurance Premium?
A home insurance premium is the amount of money you pay an insurance company every year to provide coverage for your home and your possessions. Your home insurance rate is based on how much coverage you choose, the size, age and type of home you have, and location, among other things.
Who Needs Home Insurance?
Although home insurance isn’t legally mandatory, if you have a mortgage, you will need to purchase home insurance, because most lenders require it. Even if you are mortgage-free, purchasing home insurance is a good idea. Since your home is probably your largest investment, it’s important to protect it.
Why Is My Home Insurance Score So Low?
Risk factors that might explain why your home insurance score is so low include: Your house is older. You have a history of filing claims. You’re located in a high-crime, flood or hurricane-prone area. You live far from fire rescue services. A low home insurance score means higher premiums.
Does Getting a New Roof Lower Home Insurance Rates?
Yes. Getting a new roof can lower your home insurance rate anywhere from 5 to 35 percent, as well as prevent interior water damage. Before replacing your roof, check with your insurance provider about which type of roof/roofing material is best for where you live.
Does Having CCTV and a Security System Lower Home Insurance?
Yes. CCTV and a home security system help lower the cost of your home insurance. That’s because homes with security systems are 300 percent less likely to be broken into. To receive the best discount, your security system must be connected to a central alarm station and professionally monitored 24/7.
Why Do Home Insurance Premiums Increase?
Because home insurance rates are based primarily on the cost of repairing or rebuilding your home if it is damaged or destroyed, inflation is factored in. More events (extreme weather, burglaries, etc., in your area) that increase the likelihood you will file a claim also cause home insurance rates to increase.
Seven Ways to Lower Your Home Insurance
- Maintain/improve your credit score.
- Don’t file claims for minor events.
- Update your roof, electrical equipment and plumbing.
- Add/improve your home security.
- Raise your deductible.
- Purchase flood insurance. (Flooding is the #1 natural disaster in the U.S.)
- Review your coverage with your insurance provider annually.
All it takes is one fire or one really devastating storm to damage or destroy your home. If you don’t have home insurance and the unthinkable happens, can you afford to live somewhere else while your home is repaired? Or, pay to rebuild your home and replace your belongings if everything is destroyed?
Working with a trusted, knowledgeable home insurance advisor like those at JAISIN can’t prevent such events from occurring, but their guidance can provide the protection you need when bad things happen.
Plus, they understand the marketplace and are experienced at combining policies like home and auto to help lower your insurance rates. You can also count on them to determine the coverage you need, shop the market for competing quotes and make sure you receive all the discounts available.
Should I increase my deductible? I don’t live in a flood zone, do I need flood insurance? How much will I save if I install storm-safe windows? I renovated my kitchen. Should I update my coverage? For answers to these questions and more, click or call JAISIN Insurance Solutions today to talk with one of our home insurance advisors.