We all have to have homeowners insurance because it’s the right thing to do. But when you’re looking for the best homeowners insurance policy, you may not know where to start. The truth is, there are a number of different factors that can affect your rates. Because of this, it can be tricky to find an affordable policy. But if you follow the steps below, you should be able to find a good policy that fits your budget.
Do Your Research
Mortgage lenders can’t make you use a specific home insurance company. When you’re choosing an insurer, shop around to get quotes from several companies. Many insurance companies offer online applications that help you enter information once and then save it for different policies. You may also get discounted rates through your employer or an association you’re a member of.
Speak to Your Insurance Agent
Before you start exploring ways to reduce your insurance costs, it’s important to understand what your existing policy covers. Some insurers have attempted to make their contracts easier to comprehend by including sections that explain what a particular part of your policy does and does not cover. One of the first pages in any policy is the Declarations Page, which essentially summarizes the coverage you will receive.
Claim Every Discount You Can
Insurance companies offer several discounts to homeowners to encourage responsible ownership. The biggest—more than 35%–goes to those who pay their premium in full each year. But homeowners who bundle their home and auto policies with the same company can save more than 19%.
Increase Your Deductible
Boosting your deductible by $500–$1,000 can help lower your insurance premiums by 25%. The Insurance Information Institute also recommends lowering your premiums by maintaining a high-deductible policy if you can afford to pay more in case of claims.
Include Flood Insurance
It’s important to be aware of the possible risks of floods because they are the number one natural disaster risk in the United States. Even if you aren’t in an official flood zone, it’s smart to buy flood insurance. Floods cause a lot more damage to homes than other natural disasters—that’s why mortgage lenders often make flood insurance a requirement for homeowners in flood zones. People who live in areas not prone to flood can buy much cheaper insurance than people who live in flood areas. But one in five flood claims come from homeowners in non-flood-prone areas.
