If you are a first time home buyer you can save money on your insurance premium in any number of ways.
Insurance is just a fact of life. You need health insurance, car insurance, life insurance, and, of course, insurance for your home. In many cases buying some level of financial protection is required by law, but even if it isn’t you will probably be required to have some sort of insurance in place before you can make any major purchases in your life.
Next to your life, your home is the most important thing that you need to insure. Your house is a huge investment and you will want to protect it from theft, destruction or disaster. Having coverage is often required before you can even get financing for your new home.
If you are a first time home buyer, you might have cut costs and saved to get your down payment, cover closing costs, and to budget for your new monthly mortgage payments. You still have to account for insurance payments in this budget and no doubt you will want to save as much here as you can.
On average you can expect to pay anywhere from $900 to $2,000 a year on your insurance (depending on your state and the home itself). If you have been with a company for a while you might get some sort of loyalty discount but if you are a first time home buyer, this is not really and option,
Here are some points to consider when insuring your property that could save you money.
DON’T SKIMP
initially, may seem like a bargain to go with some company you have never heard of to save a ton of money, but when bad luck hits will they be there for you? In the long term having a dependable company and adequate protection for your home will save you a lot more money that you would have saved on the front end by skimping.
Having said that….
SHOP AROUND
While your mortgage lender may offer some sort of home coverage, or at least point you in the direction of an insurer they are familiar with, you should really look into finding the right company for you.
Spend some time and you may not have to spend as much money. You might ask around to see what insurance companies your friends use and why? You can check consumer guides, insurance agents, companies and online insurance quote services to get an idea of price ranges.
Talk to a number of insurers but don’t just consider the price. A good insurer should offer a fair price as well as deliver great service and instill confidence in you that they will be there for you should the worst happen.
In addition, you can check with the NAIC (National Association of Insurance Commissioners (www.NAIC.org) for information that can help you when looking for an insurer, including complaints and comments from other users. It’s like the Better Business Bureau for insurance.
Finally you can check to see if there are any “first time home buyer programs” available with the companies you find.
RAISE YOUR DEDUCTIBLE
If something happens to your house and you have a higher deductible, then you will pay MORE money toward the loss before your insurance company starters to pay a claim. This could, however, save you money on your premiums.
If your house is relatively new and in good shape then you might be able to afford to risk paying a higher deductible. In general, the higher your deductible, the more money you can save on your monthly premiums. Depending on your state and policy, you could save as much as 25%.
If your house is in an area of the country that is prone to floods, fires, or bad weather, your insurance policy may have deductibles for different situations. For example you might have separate deductibles for wind damage and flood damage. If you live in an earthquake prone area, likely your policy has an earthquake deductible.
YOU ARE ONLY INSURING YOUR HOUSE
When purchasing your policy it is only the value of the house that you should be looking at when deciding how much coverage you need. The land that the house is built on is not at risk from weather and no one is going to steal it.
Buy only the coverage that you need.
BUNDLE
Most Insurance companies carry more than just homeowners insurance. You still have to cover your car so why not combine the two with the same company. This sort of one stop shopping makes things easier on you and it’s a benefit to the insurer. So much so that they will often offer you a substantial discount for bundling the two policies together.
If the company is primarily a home insurance company they might charge a bit more for your car insurance. The savings in the home insurance for bundling should more than make up for it.
GET A GOOD HOME INSPECTION
Before you buy your first home, get it inspected. This will clue you in to any problems that may arise in the near future. If there are any hidden problems with the house you can have them taken care of before you buy. Less claims mean lower premiums
The inspector may also have some suggestions on how to improve your house that may discount your insurance.
A GOOD INSURANCE HISTORY
If you were renting before you decided to buy your new home and you had renters insurance you have built an insurance history that could lower the cost of your home coverage.
Many insurance companies offer discounts to people that show a history of coverage with no claims.
HOME IMPROVEMENTS
Making improvements and/or additions to your home could also save you money on your premiums. Installing a good security system could save you from 2 to 5 percent, automatically.
If you upgrade the major systems in your house. Such as, the electrical, heating and plumbing your premium may be reduced. In this case, your home will be less vulnerable to flooding from burst pipes or electrical fires.
You can repair the roof, add smoke detectors, install gas sensors, or any number of things to disaster proof your home. If you talk with your insurance company they might just save you money in the long term.