Whether you are reviewing your home insurance renewal or shopping for a new insurance policy, finding the best premium to cut your insurance costs and save money is important. People sometimes think that if they have a price, it's already the best it can be, but over time your personal situation and the discounts an insurance company will offer may change so it is worth making sure you are getting all the possible discounts on your policy. Here are some simple ways to lower costs on your home insurance without reducing your coverage by using credits and discounts.
12 Types of Home Insurance Policy Credits and Discounts That Can Save Money On Your Insurance Costs
Everyone has heard that bundling your insurance (having your home and car insurance with the same insurance company) can save you money, or that being claims-free will give you a discount. These are the obvious discounts that we hope you are already taking advantage of. Usually, an insurance company will be aware of these facts, so getting those discounts is generally automatic. You may have also heard that taking a higher deductible can save you money on insurance, you can learn more about how to use your deductible to save you money here. However, in this list, we are going to go through some less obvious credits that people often take for granted, or may not even know about, and hopefully, this will help you knock some money off your current insurance premium.
- Home improvement credits, green home credits, new construction or renovation credits. When people keep their homes well maintained and have updated roofs, windows, or wiring, for example, many of the risks will be reduced. Make your insurance company aware of any of these to see if you get credits.
- Loyalty credits. Loyalty credits are discounts an insurance company may be willing to give you if you are with them for several years. Sometimes this is called a renewal discount, other times it may be a loyalty credit or even a discretionary credit that the company will give if you ask for it. Every company is different, even if they don't have a discount by this name, let your insurance representative know that you're shopping for the best price and you're wondering if the insurance company might not review your rate due to the fact that you've been loyal. It never hurts to ask.
- A good credit score discount. Insurance companies have found that a good credit score is directly related to lower claims incidence. Find out if you can get a discount for having a good credit score and learn more about insurance credit scoring and how that works here.
- Water Protection Device Credits and water shut off valves. Water damage is a major source of home insurance claims, so if you have extra protection some insurance companies will discount your premium for this.
- Gated community or HOA (Homeowners associations) credits. Living in neighborhoods or communities with increased security, like camera monitoring, 24 security guards or even a neighborhood watch may get you a discount.
- New Homeowner Credit. If you are a first-time homeowner we have many tips to help you save money when you shop for your first home insurance here, but you might also be able to ask for a first-time homeowner discount. It is not available with all insurance, but it is worth the ask.
- Alarm systems (monitored) with more than just fire and burglary. A lot of people focus on the fire and burglary portion of an alarm discount and forget to tell their insurance company when they upgrade their system or include additional protection devices like:
- low-temperature detectors,
- video cameras,
- water leak sensors,
- cellular back up.
The addition of these protections may add double the discount (if not more) of just a standard fire and burglar alarm. So when you ask if you have an alarm discount be sure and ask if all of the above are included or ask how much more you would save by upgrading your system. Also, note that a monitored alarm system will give you the best discount as opposed to a local alarm which is not as effective.
8. High Tech Sensor credits Some insurance companies may offer 5-10 percent in high tech sensors or smart home credits.
9. Dry hydrants (for rural areas and locations that are not within close proximity to a fire hydrant). Investment in a dry hydrant may save thousands of dollars on home insurance premiums for properties in areas that are more remote. According to the National Fire Protection Association, there were over 1.3 million fires reported in the United States in 2017. When your home is in an area that does not have access to an adequate water supply, the price of your insurance will normally be higher. Ask what kind of discount you get if you have a dry hydrant.
10. Impact-resistant roofing. Impact-resistant roofing will significantly reduce your risk of damage due to hail and other objects falling. Some insurance companies will offer a discount.
11. New Policy discount. Home insurance companies sometimes offer a different rate to a new policyholder vs. the existing policyholder. Many times the "new policy discount" could be balanced by a "loyalty discount" on renewal, but it doesn't always work that way. If you aren't getting the best rates, don't rule out your last insurer when you shop around because they may be willing to offer you a "new client discount" if you go back to them. Before you leave your current insurance company ask them if you are getting their best rates before you cancel, just in case they have other rates to offer. You can also ask your previous insurance company for a letter of claims experience to prove how long you were insured.
12. Non-Smoker Discounts and other personal discounts. Being a non-smoker may get you a discount on your home insurance policy because it may reduce the risk of fire, but this isn't the only kind of discount an insurance company will give based on your personal profile, you may also be eligible for other discounts based on:
- Your occupation;
- If you have a university degree;
- Your employer;
- Membership with certain organizations;
- Your marital status (or if you have kids);
- Retirees, seniors or students may also qualify for discounts;
- People who are mortgage-free may get a mortgagee free credit
- People who pay in one installment vs payment plans may get discounts
Getting the Most Discounts to Lower Your Home Insurance Costs
Not every company will offer discounts for all of the items on our list, but as insurance companies look to be more competitive in attracting their target client, discounts like these will come into play. Asking about these discounts will help you find the company that will give you the lowest price while saving you money on your home insurance without having to reduce your coverage.