Though constructing or purchasing a house can be a tiring and stressful process, but it is the best investment you can make. Keeping in mind the importance of such investment, it goes without saying that you must get a home insurance plan to protect your house from any possible danger or risk. Home insurance policy depends on a lot of factors, and it is going to be an add-on expense for your budget planning. However, some ways can help in reducing the insurance premium.
Here are 10 tips on reducing the premium of your home insurance plan
- Try to maintain a good credit score
The credit history of the applicant plays a vital role in deciding the insurance premium nowadays. A good credit score can have a notable effect on the insurance premium. On the other hand, an unhealthy credit score may even harm the chances of you getting an insurance policy. To make sure you have a good credit score, pay your bills on time, and do not miss any installment or EMI. You must keep a track of credit score, and if you find any error, inform the concerned authorities to get it rectified.
- Raise the Amount of Your Deductible
A deductible is an amount that you are responsible for paying in case of a loss before The Insurance Company clears the claim. The insurance companies keep the deductible amount depending on the type of damage like an earthquake, fire, and so on. If you add more deductibles in the list, the premium amount will go down substantially as the liability on the insurance company will be lesser. In the long run, if you are sure that deductibles are affordable on your end, the savings on premium based on deductibles can make a huge difference.
- Bundle Insurance Policies
There are multiple types of insurance plans available in the market. There is always a possibility that the company that is providing you the auto insurance plan also has some good home insurance plans. If you buy home insurance from the same company, there is a possibility that the company will offer you a good discount on the premium. Compare the price you are going to pay on purchasing the policies separately with bundled insurance plans and see if you can save money based on the discounts offered by the insurance company.
- Research is the key
Buying a home insurance plan is not going to be an easy task. It required a lot of research. Though it may look time-consuming but keeping in mind that it is a significant investment, you should spend the time needed on research. You should not skip this step as, without proper research, you may end up paying a higher premium. Let’s take an example. You contacted your insurance agent to buy a home insurance plan. He suggests a few plans that sounded good and have all the features you need.
However, those plans are from the same company, and your agent never offered you plans from another company that would have cost you less. Most of the agents prefer those companies where they make more money. Thus it is important to do the research yourself. There are insurance aggregator websites that provide you comprehensive comparisons between the companies and plans. Using such websites, you can easily decide which company and plan you want to go with.
- Inquire About Discounts
Nowadays, there is always a chance that you can get good offers and discounts on the premium. Some companies offer discounts to retired applicants and senior citizens. Some companies offer a discount on your first home insurance. Similarly, there are options for group insurance policies available where you can get better offers. Now, other than the discounts offered by the insurance companies, you can also check for the offers available on the mode of payment.
For example, if you use NEFT or a specific bank’s credit or debit card, you can avail good discount or cash back. In some cases, you can use a specific app to pay the premium and avail cash back. There is no end to finding offers and discounts, and all you need to do is look around before you make the payment.
- Install home security equipment
Home safety and security gadgets like smoke detectors, CCTV cameras, burglar alarm, deadbolt locks, and sprinkler systems, etc. help in reducing your premium cost. Insurance companies charge less premium from those applicants who make an effort to ensure the home is safe. However, it is better to check with the insurance company how much discount you can avail of such gadgets.
- Loyalty with the insurance company
If you stick with the same insurance company for an extended period, there is always a chance that they will offer you a discount on premiums. Depending on the age of your contract with the insurance company, the discount may go as high as 20% to 30%.
- The new house is always better
The age of the building plays a vital role in deciding the premium cost. Insurance companies offer plans on lower premium rates of the construction is new. The logic behind such a discount is that a new house is more likely to have lesser problems associated with plumbing, heating, and electrical systems. Also, in new buildings, chances of structural damage due to weather conditions are less.
- Location of your home
The location of the house that you want to get insurance also has an impact on the insurance plan. If your house is in a locality where the crime rate is on the lower end, the insurance company will ask for a lesser premium. On the other hand, if your home is in a locality where there are chances of any natural or man-made calamity, the insurance company will charge a higher premium. If your home is located near the fire station, it will also have some impact on the premium.
- Insure only what you have to
There are a lot of personal belongings that may not need coverage, or you can afford to replace them on your own. It is better to remove them from the list of insured items to reduce the premium cost.
To sum up…
Constructing or buying a home is the most important investment you can make in your life. Thus it is important to get an insurance plan to ensure you have coverage in case of any damage to the property or your personal belongings. Keeping in mind that premium on home insurance is an annual expense; the above-mentioned tips will help you in reducing the premium cost.