The average home in America costs $408,800 – according to Statista. That’s a substantial and often lengthy investment that can result in a pot of money at the end of a mortgage agreement. Considering the average cost of a home in America in 2020 was $389,400, we can assume that the value of homes will continue to increase steadily over the years.

Such a big investment deserves protection, and that’s where homeowners insurance comes into play. Still, it pays, literally, to know how you can keep the costs low and get the right deal for your insurance needs. Keep reading to find out more.

The Cheaper Home Insurance Options

85% of people in the US have homeowners insurance, 79.09% of which are HO-3’s – a type of home insurance coverage that we’ll discuss further along. HO-3’s are the most popular type of home insurance policy because it covers all the necessities, such as liability, dwelling damage, theft, fire, the list goes on. Mortgage lenders typically prefer this type of coverage or an HO-5. An HO-5 policy covers you for everything and more, including items like jewelry.

Although this is the most comprehensive, you should consider an HO-3 to keep the costs low. To really keep the price down, you could consider an HO-2 insurance package which is a bit more basic than an HO-3 because it doesn’t always cover liability. Beware, however, not all mortgage and home loan lenders will be satisfied with an HO-2 – some require an HO-3 or higher.

Use The Same Insurer For Multiple Purposes

An age-old trick in the book. Some insurers favor customers who purchase multiple policies with them, offering generous discounts if you pay to insure your home and your car, for example. That’s why shopping around is advisable. Some insurers are willing to provide up to a 15% discount for customers who have multiple insurance policies with them.

Others will discount if you recommend a friend or family member or if people in the same household also use their services. So, if you have a home insurance policy and one of your children has an auto policy, you both might get a discount.

Increase Your Homes Security

Break-ins are more prevalent than they have ever been before. Home insurance application forms typically ask what security measures you have in place for your home. They want to know how easy it is for someone to get into your home – so what type of locks you have, if you have a functional alarm, and any other security features your home might have.

Break-ins are not the only security threat; most insurers will ask whether you have a working smoke alarm or a sprinkler system. The more you have, the more discounted your policy is likely to be. Some home insurance companies have been known to give out up to 20% discount for additional security features.

Look For Additional Discounts

Discounts for home security or multiple policies are not the only discount you should look for. Most insurers have multiple discounts available, but they don’t always make them the easiest to find. For example, most insurers will take into account your life and how often you’re at home.

If you work for emergency services, for example, you’re more likely to be out of the home for long hours, leaving it at the peril of danger. However, if you’re retired, you’re more likely to be at home more often and present to prevent a break-in or detect a fire. Retirees can enjoy up to a 10% discount with some companies.

Similarly, some insurers offer student discounts, family discounts, and government worker discounts. Again, that’s why shopping around is essential to see which insurer offers the best deals.

Review Your Policy Yearly

Circumstances change, possessions change, and property value changes. That’s why you should consider reviewing your policy every year rather than letting it auto-renew. You might find that you included some items on your policy that you no longer own, or even that there are some items that you would like to be covered that aren’t on the policy. Changing that now would mean you save money in the long run if something were to happen.

Stay With The Same Insurer

Technically another discount, but some insurers offer a policy discount for loyal customers, with the amount you save increasing the longer you’re with them. That’s why most insurers tie you into an auto-renewal rather than waiting for you to renew. They want loyal customers to stay with them for years. Although, it is also advisable to check with other insurers to see if you can get a better deal.

Home insurance can be a complicated minefield to navigate, but there are plenty of self-help articles online like this one that should help guide you towards the right policy. The right home insurance deal will give you and your possessions a financial safety net should something go wrong. Although, typically, you will never have to call upon a home insurance policy.

 

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