Helpful Mortgage And Real Estate Advice

What Steps Could I Take To Lower My Homeowner’s Insurance Costs?

By on January 15, 2014 in Home Buying Advice, Mortgage Videos

Homeowner’s insurance is mandatory for any homebuyer, and must be presented on closing day to gain access to the property. Like any insurance policy, however, the premiums can be exorbitant, depending on the home’s size, materials and location. There are several ways to lower your homeowner’s insurance policy through strategic property selections and decreasing the property’s risk of damage.

Compare And Contrast

Do not settle on the first policy you encounter. There are literally dozens of insurance providers vying for your business. Ask for three to four quotes from different companies to get an idea of your property’s insurance needs. Many companies may quote high prices, whereas others could offer a discount to bring you in as a client.

Consider The Home’s Location And Construction

If your home is near a fire department or hydrant, for example, the insurance policy will be lower compared to homes farther away. A home residing in a low-lying area, however, increases homeowner’s insurance because the property is prone to flooding. A home’s location plays a large role in insurance premium calculations. Areas prone to earthquakes, tornadoes or hurricanes also incur high homeowner’s insurance rates.

A home constructed recently, or an established property with brick construction, is more reliable in the face of daily wear and tear, or natural disaster. As a result, homes built with new or sturdy materials have lower insurance rates than other nearby structures.

Discover Alternative Discounts On Your Insurance

Once you’ve decided on the perfect home, it may not have the lowest insurance costs. You are not relegated to high prices for several decades, however. Try raising the deductible to lower the monthly premiums. Budget yourself financially to be able to cover the deductible in an emergency if you decide to raise it. Alternatively, look for group coverage through a close association, such as an alumni group.

If you have car insurance, it is typically cost-effective to have your homeowner’s and car coverage through the same company. Bundling policies lowers both rates, saving you money on the home and car at the same time. Add a home alarm system to the property to lower the insurance premiums as well. Because there is less chance of property damage and theft, the premium drops significantly.

Homeowner’s insurance is a critical part of homeownership, but you can find a budget-friendly policy with some creative bundling and researching. Be aware of the available discounts and take advantage of them each policy year.


About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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