30 Ways To Save Money On Homeowners Insurance - YA

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30 Ways To Save Money On Home Insurance

Homeowners know that home insurance prices only seem to go up. Here are the top 30 ways to find savings on your next home insurance bill:

  1. New Roof Update
    Insurance carriers love a new roof. The roof is the most common point of failure in a home insurance claim. Wind and hail claims are most likely to do damage to a roof, and a roof replacement is not cheap (often $12,000). A damaged roof can lead to water damage and mold, which is expensive to repair as well. When carriers see a new roof, they gain comfort in knowing it probably will not need to be replaced anytime soon. Many carriers give substantial discounts on premiums (over 10%) if your roof is brand new or only 0-5 years old.
  2. Higher Deductible 
    Your home insurance deductible is how much you will pay out of pocket before the insurance company steps in for a covered loss. Increasing your deductible will lead to savings, even if you only increase it from $1,000 to $1,500, insurance carriers price in a more responsible homeowner that is less likely to file a claim. And with that deductible, in a claims scenario, they are paying $500 less!
  3. Self Insure
    Not recommended, but the cheapest home insurance policy is no policy at all. If you have a mortgage, you do not have this option as your lender will require you to purchase home insurance on the property. However, if you own your home outright and have no mortgage, home insurance is technically an optional purchase. You have to ask yourself: if my house were to burn down tomorrow, would I be ok financially? If the answer is yes, you could skip on the purchase, but I do not recommend this option.
  4. Update Heating, Electrical, and Plumbing
    HVAC, electrical, and plumbing systems have a pre-determined useful life before they need upgrades. Depending on your geography, most carriers start getting worried about a claim if your home is over 40 years old without any updates. The best way to become eligible with more carriers and even get discounts is to update your heating, electrical, and plumbing systems in the house. 
  5. Hip Roof Shape
    The shape of your roof can be a significant factor in determining the likelihood of roof damage from windstorms. While most roofs have gables on each end, some are hip shaped. A hip roof shape has a single peak in the center and is downward sloping on all sides. The hip geometry prevents wind pressure from getting stuck in the pocket of a roof gable and potentially blowing off the roof! You can't change the shape of your roof, but if you do have a hip roof and live in an area where high winds or hurricanes are frequent, make sure you get the hip roof discount. It can sometimes be 30% off your premium!
  6. Fire Alarm/Sprinkler System
    The most significant potential loss from the carrier's point of view is a total fire loss, meaning the whole house burns down. If you have systems that prevent a fire loss or reduce the severity of fire damage, then you should get a discount. As fire burns fast, the difference between a 15 minute and 30 minute response time can mean a $70,000 vs. $700,000 loss for the insurance carrier.
  7. Improve Your Credit
    A large piece of home insurance that homeowners may not think about is the billing and credit. Insurance carriers and agents put in a lot of upfront costs to price the home insurance and inspect the property. If they go through all this work, only to find out the individual cannot pay their bills, it is a terrible investment of time and resources. For this reason, insurance carriers give discounts to customers who have strong credit ratings. Note: in some states, like California, credit is not an approved rating factor, so insurance carriers cannot offer discounts or surcharges tied to credit scores.
  8. No Claims History
    Try to avoid filing a claim that is less than 3x your deductible. Many people believe that since they purchased insurance, they should use it. This strategy is the wrong approach because carriers price insurance based on claims history and even give discounts if there are no claims in the last five years. If you have a $1,000 deductible, it won't make sense to file a $1,500 claim today, get $500 from the insurance carrier, and then lose your claims-free discount for the next five years. Generally speaking, it's best to save your home insurance policy for significant claim events. There are even specific cities, like Pittsburgh, where homeowners often fix smaller issues around the house rather than filing an insurance claim, and they are rewarded by having some of the lowest home insurance rates in the country!
  9. Don't File Claims That Aren't Covered
    Here is another piece of insider knowledge that most people don't know about. If you file a claim with the insurance carrier, and that claim is denied, it still goes on your claims record for the next five years. That's why at Young Alfred, we always recommend our customers call us first before filing a claim. You don't ever want to spend time filing a claim that won't be covered, and sometimes it takes an expert that understands the language in your policy document to know if you have a shot at being paid out.
  10. Sell the Trampoline
    Trampolines are fun for all ages, but they are also the source of many injury claims. If you or someone in your family gets injured on your trampoline, your home insurance will not kick in, but instead, your health insurance. However, if a guest or neighborhood friend of your kid is jumping on the trampoline and breaks their neck, they can sue you, and your home insurance would step in defend your liability as the injury happened on your property. A way to minimize the risk of injury, and improve your eligibility with insurance companies, add a safety net to your trampoline
  11. Get a 4 Point Home Inspection
    This discount is for Floridian homeowners. Homes over 40 years old in Florida will require a 4 point home inspection. This inspection checks that your HVAC, plumbing, electrical, siding, and roof are all up to code and do not need significant updates. If you are buying a new home in Florida and it is an older vintage, you should demand the seller of the property pay for this inspection as part of the appraisal process. It will not only help you get more affordable home insurance but also ensure you aren't buying a property that will need some repairs right after you move in.
  12. Remove the Slide/Diving Board from Pool
    Who doesn't love trying to do a flip off a diving board or going headfirst down a water slide? Well, insurance carriers. The data says diving boards and water slides on a pool are huge liability risks. If a neighbor's kid is over and does a backflip a little to close to the diving board and ends up in the hospital, you might be getting a lawsuit. Your home insurance personal liability coverage (coverage E) would likely be footing a hefty bill, and so insurance carriers hate behind exposed to these risks. A pool without a diving board or slide is far more acceptable in the insurance community.
  13. Burglar Alarm/Security Camera
    About 1 in 270 homes file a burglary or theft claim each year. The average theft claim is just over $4,000. The best way to prevent a burglary is to have a burglar alarm or security camera on the premises. Most insurance carriers give a 2-8% discount for having a security system on the property. There are many home security devices now available on the market, so make sure your system is eligible with your carriers before assuming you can receive this discount.
  14. Storm Shutters/Hurricane Grade Windows
    If you live in an eastern coastal state, then you have probably experienced the power of hurricane grade winds. It often isn't just the wind either, but all the debris that the hurricane picks up and throws at your house. Storm shutters can help reduce the probability of broken windows, and hurricane grade windows can reduce the chance of a direct hit from a projectile leading to shattered glass. In these coastal regions, insurance companies offer massive discounts for hurricane grade protection on all the openings of your home: windows, door, garage.
  15. Wind Mitigation Report
    The wind mitigation report is a friend of every Floridian homeowner. It can routinely cut your insurance bill by up to 50% when your roof is hip shaped, and your opening protections are hurricane grade. The report costs about $75 and is completed by a licensed home inspector. The report is also valid for five years, so if you are buying a home and the previous owner has a report done recently, you might be able to use that! If you are serious about getting massive discounts for home insurance in Florida, you will need to get this report.
  16. Pay Off Your Mortgage
    Home insurance companies know homeowners treat their home a little better if they own it outright vs. it still being mostly attached to a mortgage. While not all carriers offer this discount, some do, and it is an excellent saving for those in the fortunate situation of having paid off their mortgage.
  17. Hail Resistant Roofing
    There are certain hail regions of the US where hail resistant roofing is a worthy consideration: South Dakota, Nebraska, Kansas, Colorado, and Texas. Home insurance companies see a lot of hail claims in these states, and so offer significant discounts for hail resistant roofing. The difference between replacing a new roof and it surviving a hail storm can be $10,000 to the carrier, so they are happy to pass those savings back to you in the form of lower premiums.
  18. Move Closer to a Fire Department
    If your home were to catch on fire, the number one factor on the severity of the loss is fire response time. Put another way, how long does it take to put the fire out. If you live close to a fire station, you should get a discount. If a fire station is within 5 miles of your property, that is good, within 1 mile is phenomenal. If you are more than 5 miles from a fire station, some carriers may not insure you or charge extra.
  19. Paid-in Full
    Most homeowners know that if you pay for the whole year upfront, you get a discount. The best way to take advantage of the paid-in-full discount while still effectively paying a monthly rate is to pay the home insurance through your mortgage/escrow account. The escrow account will pay the insurance carrier in full for the year, so you get the paid-in-full discount, and then just add the insurance premium to the balance of your mortgage, so you end up paying monthly. (with some small amount of interest) 
  20. Trim Your Trees
    Home insurance covers damage from falling objects, so if a tree or large branch falls on your house, it is covered. However, insurance companies may not insure your home if they see large branches overhanging the roof. It's best if you have a large tree touching your roof to get a professional out there to remove branches. This gets even more awkward if it is your neighbor's tree branch on your property. If you live in an area with large windstorms, hurricanes, or tornadoes, removing these large branches or pulling out a dying tree is incredibly important.
  21. Bundle Home & Auto
    Bundling home and auto isn't just easier for payment and managing your account, it also can save you money! Bundle discounts can range from 5% to 40% each year based on the insurance company. If you are a homeowner, you likely have a car or two as well. While it is worth checking bundled rates, don't assume that is always the best option. At Young Alfred, we review both bundled prices and mix and match for our customers, and we find the bundle is better about 50% of the time, and 50% of the time, it is better to split insurance between two companies. 
  22. Avoid These Dog Breeds
    Bad owners are usually responsible for bad dog behavior, not bad breeds. Unfortunately, insurance carriers don't have a way to change the price of insurance based on a dog owner score, so they instead resort to the next best piece of data: the breed of dog. Dog bite claims are both severe ($37,051 on average) and common among certain breeds (pit bulls, Staffordshire bull terriers, etc.). Many insurance carriers will not insure your property if you have certain dog breeds on the premise.
  23. Don't Switch Too Often
    Homeowners don't shop for homeowners insurance too often. However, a minority of homeowners shop for new insurance each year. The disadvantage of shopping every year is your current carrier may provide loyalty discounts over time, and other carriers you may find might not always be the best fit for your long term. Also, every time you switch, you have to go through a new home inspection. There is a chance that your new home insurance company finds an issue at inspection that they require you to repair. This can be a good outcome as the company forced you to take action and reduce risk, but at what cost to you?
  24. Use an Insurance Agent
    A good insurance agent should be knowledgeable about local discounts available in your area that you would have difficulty finding by yourself online. They also work with more insurance companies and so you can make sure you are getting a fair and affordable rate for your coverage. They are especially helpful when it comes to identifying coverage gaps and bundling multiple policies like flood, umbrella, or earthquake insurance. Insurance agents like Young Alfred are far more digital today as well, so you can work with them entirely over email if you so choose!
  25. Reduce Coverage You Don't Need
    In every insurance policy, there is probably some piece of coverage you do not need and could find savings by reducing unnecessary coverage. The best places to find savings on your policy are to check Coverage B and Coverage C. Coverage B provides coverage for other structures not attached to your home: a fence, gazebo, barn, etc. Coverage C provides coverage on your personal belongings, which is usually a fixed percentage of coverage A. For higher value homes, this Coverage C can overshoot the actual value of your personal property.
  26. Get a Quote At Least 8 Days in Advance
    The advanced quote discount is very easy discount to get and can often be ~5% off your premium. Most carriers give a discount that increases from 1-day to 8-days in the future. As with most events in life, it is best to plan for the future. If you are starting new coverage, set the new policy's effective date to 8 days in the future.
  27. Retire
    Retiring isn't something you can just do tomorrow, but if you are retired, make sure you are getting the retiree discount! Retired people are at home more often and more experience homeowners, so they are less likely to file a claim and usually get a discount on their home insurance. Being home more often means they are more likely to catch a problem quickly (water leak, fire, or theft). Being an experienced homeowner means they are more likely to do the proper preventative maintenance to prevent damage to their home. Carriers love it!
  28. Maintain Continuous Coverage
    A lapse in coverage can be expensive. Many carriers will not quote a homeowner that has a period of no insurance, and those that do may charge a lot more for the same coverage amount. The reason is many homeowners do not carry insurance, and then go out to buy it after they need it. 
  29. Sign Up for Paperless/E-signature -
    Saving trees, saving paper, saving money. The e-signature discount is great for the insurance industry and great for homeowners too! After you find a policy you like, to start your coverage, all you need is a few mouse clicks, and you are good to go! The paperless discount is usually small (only a few dollars), but a no brainer to add on to your policy.
  30. Go Shopping - 
    Young Alfred has built the most advanced home insurance shopping tool on the web. We don't need your phone number or sell customer information, ever. Our technology connects directly with 40+ top insurance carriers to find the best coverage options in your area. We take pride in being the smartest, most customer-friendly agent on earth. We look forward to serving you for years to come!

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Young Alfred 30 Ways to Save Money on Home Insurance