If you’re a new homeowner, get ready for new expenses coming your way, including property taxes, repairs and maintenance, and, most importantly, homeowners insurance.
As a homeowner, insurance is imperative. Not only do most mortgage companies require it, but a solid policy will pay to rebuild or repair your house in the event of some disasters, such as a fire or water damage from a burst water heater. It will also pay to replace your belongings if your house is robbed.
This peace of mind comes at a price. In fact, it will cost you an average of about $1,100 a year, according to the Insurance Information Institute. At the same time, there are many discounts available. To help you find the best rate, check out our top ways to save on homeowners insurance as a new homeowner:
1. New homeowner or new customer discount
As a new homeowner, be sure to ask insurers what they can offer you in terms of savings. Liberty Mutual, and Travelers, for example, offer discounts if you’ve recently purchased a house, and Allstate offers up to a 10% savings for both new home buyers and new customers purchasing homeowners insurance.
2. Bundle your homeowners and car insurance policies
Many insurance companies offer discounts if you purchase both your auto and homeowners insurance in a bundled package. If you already have car insurance, you can start by calling your auto insurance company to see what kind of bundled deal it can offer you. From there, you can shop around and compare prices. This may mean switching your auto insurance to another provider, but if you can save money on both types of insurance, it may be worth it. Nationwide, for example, offers up to a 20% bundled discount and Allstate offers an even bigger discount, up to 30% (compared to what you’d spend on separate policies that aren’t combined).
3. Secure your home
While you’ve got many other new expenses on your plate, home security – including alarm systems, deadbolts on your doors and smoke detectors – may offer a heightened sense of safety while also saving you money on your homeowners insurance. Nationwide and Allstate, for instance, both offer a 15% discount for homeowners with protective home security devices.
4. Choose a higher deductible
A deductible is the amount you’re required to pay before your insurance company will pay out on a claim. For example, if your deductible is $1,500, this is the amount you would first need to pay before your insurance covers the rest of the costs. Oftentimes, a higher deductible means you’ll pay a lower premium and thus lower monthly payments. While this may save you money each month, keep in mind that a high deductible mean you’ll pay more out of pocket if you suffer a loss.
5. Search for less common discounts
While you may have already heard of some of the above savings, here are some less common discounts that might be worth looking into:
- Automatic payment discount. Some insurance companies will offer savings if you pay via automatic deductions from your bank account. In the case of Allstate, this form of payment will save you 5% off your bill.
- Personal relationship status discount. If you’re married or widowed you can save up to 5% off your insurance policy at Nationwide.
- Environmental discount. Traveler’s Insurance offers a Green Home Discount. Yup. If your house is certified green by the Leadership Energy and Environmental Design organization (LEED), you may get up to a 5% discount.
- Non-smoking discount. If no one in your household smokes, you may be entitled to a smoke-free discount. Why? Because smoking can cause thousands of dollars in fire and smoke damage and thus non-smokers are less of a risk to insure, according to Farmers Insurance. Both Farmers and Esurance, an Allstate company, reward non-smokers with lower rates on homeowners insurance. To find out exactly how much you can save, you’ll need to call the insurance company.
As you can see, there are many homeowners insurance discounts out there. In some cases, these savings vary depending on which state you live in, the age of your home, and other specific factors related to your particular house. It’s best to shop around and call various insurance companies before choosing your policy.