How To Get Homeowners Insurance Discounts

18 Oct

Owning a home is huge financial commitment. There is the cost of the mortgage as well as maintenance costs and the cost of insuring your home. When it comes to insurance, the price you pay for coverage can vary dramatically depending on the variety of factors. Insurers consider the location of your home, the cost to rebuild, the value of the property as well as your personal factors such as your credit score. 

Luckily, insurance companies offer a variety of discounts that can help lower your premiums and keep your homeowners insurance affordable. Let’s have a quick look at discounts, the most common discounts, how to add them to your policy and how much you can save when they are applied to your policy.

How can I get discounts applied to my homeowner policy?

Insurers typically offer discounts for items that reduce the risk of making a claim. As an example, most insurers will offer a discount for monitored security systems, wind or hail resistant roofing materials, and even installing carbon monoxide detectors. 

Your insurer will gather information about your home and your personal risk factors as well as features of your home and life that qualify for a discount. Always make your insurer is aware of any features of your home that could qualify for a discount. 

Here are a few of the most common discount’s insurers offer for homeowners:

Bundling: This is one of the most common homeowner insurance discounts. When you carry your home and auto or other insurance coverages with the same insurer, they will offer you a discount. In most cases, a bundling discount can be significant. 

Security/safety upgrades: Upgrading your home to make it safer and more secure will always result in a discount. Insurers offer a wide variety of discounts for security upgrades, here are a few of the most common:

  • Deadbolts on exterior doors
  • Fire extinguishers
  • Smoke detectors
  • Carbon monoxide detectors
  • Water leak detectors
  • Gas leak detectors
  • Burglar and fire alarm systems
  • Sprinkler system

In addition to security and safety discounts, insurers often offer discounts for smart home devices such as ring cameras, smart thermostats, and home monitoring systems.

Home improvements: Upgrading your home to make it more resistant to weather damage is another great way to lower your premium. If you live in an area where severe weather is an issue, adding storm shutter or impact resistant roofing materials will often result in a discount.

Loyalty discounts: If you stay with the same insurer for many years, they should offer you a loyalty discount. While it won’t be a huge discount, probably in the range of 10 percent, every little bit helps. 

Claims-free: If you manage to stay claim free for at least 3-5 years you may qualify for a claims free discount. This won’t be a huge discount, but they all add up. 

Discount Limits

There are limits to discounts, the amount can be capped depending on your situation. Here are a couple of limits that relate to discounts:

  • Discount caps: There can be caps on home insurance discounts which means that there may be a limit to how much savings you can qualify for in discounts. It varies by insurer, but many put a 40 percent cap on discounted savings. 
  • You may not qualify for the maximum amount: Some insurers may offer less than the maximum discount. As an example, if you have been claim free for 3 years you may only get half of the discount which will be increased to the full amount once you hit 5 claim free years. 
  • Discounts vary: Discounts vary by insurance company and some insurers may offer a discount that is not offered by another insurance company. Discounts can also vary by state, some states don’t allow certain discounts. Talk with your insurer regarding the discounts they offer.

Other tips for savings

Here are a few tips for lowering your premium:

  • Shop your coverage: Insurance companies rate risk differently which can result in dramatic differences in premium quotes. Shop your coverage on a yearly basis and get quotes from at least 5 insurance companies. 
  • Up your deductible: Insurers like it when you have more skin in the game so if you up your deductible, your premium should go down. Always choose a deductible that you can easily afford in the event you have to make a claim on your policy.
  • Upgrade your home: Upgrading your roof with wind resistant materials, adding storm shutters, a monitored security system or even a sprinkler system can result in significant discounts. Always notify your insurer when you make changes to your home to see if you qualify for a new discount.

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