As home insurance rates continue to rise, owners are looking for discounts and competitive premiums now more than ever. In an effort to save money, some home owners opt to reduce the amount of coverage which can be risky. For example, if you purchase a home for $300,000 and know that about $100,000 of the price is land value, we’d recommend coverage of $200,000. However, the buyer can compare rates and pay usually a hundred or two dollars less each year by covering only $150,000. If the buyer doesn’t have an extra $50K in his/her account to part with at any given time in the case of an emergency, this can be a huge mistake.
We’ve included below 5 legitimate ways to save money on your insurance policy that don’t involve gambling with your home. And some of these tips we had to learn the hard way after years of overpaying!
Use a Broker to Shop Around for the Best Rate
For many years, we used and recommended the big, national insurance companies like State Farm until we found a phenomenal broker at a local company who could consistently outperform with lower premiums and higher coverage. As a broker, she can shop around with multiple highly rated companies to find the best price for home and hazard insurance. We eventually switched our car insurance as well because she saved us almost half, which leads to my next tip…
Ask Your Real Estate Agent for an Unbiased Recommendation
With 50 real estate closings per year, we look at approximately 50 different home insurance policies each year (in addition to our personal properties). This experience certainly doesn’t make us experts on insurance, but real estate agents tend to have a pretty unbiased opinion on which companies have good rates and customer service. It’s illegal for us to receive kickbacks or money for sending clients to these companies, so when we recommend using a particular broker or business, we’re doing so in an effort to make the closing go smoother and to help represent our buyer client.
If you’re considering getting a new policy, ask your Realtor for a recommendation. For most people, a home is the single largest investment they ever make, so you’ll want to make sure that you’re choosing a reputable, customer-service-oriented company. However, you’ll also want to ensure you’re not overpaying for coverage that you could have gotten for a fraction of the cost.
Take Land Value into Account When Determining Coverage
As we stated in our example above, land value does not need to be taken into consideration for home insurance coverage. In our Charleston SC real estate market where land can be worth more than the house itself for some areas, this is an important factor to keep in mind. You should be able to talk with your real estate agent and insurance agent/broker to determine a safe amount that should accurately cover what it would cost to rebuild the home you’re buying.
Ask for a Multi-Policy Discount
Depending on the company, you might be able to get a discount if you bundle your car and home insurance together. It’s absolutely worth asking if it saves money, so be sure to put this on your discussion checklist for your agent!
Double Check for Other Discounts
Having certain safety features in your home like a security alarm system, fire sprinkler, storm windows, and storm shutters can save money on your premium. On the other hand, factors like an older roof, a trampoline or pool in your backyard, and breeds of pet dogs (usually Pitt Bull or German Shepard) can raise your premium substantially. As you talk with your insurance agent, be sure to talk about these factors because mentioning that your dog is a 20 pound terrier (a real life example) can actually save you money (otherwise, I would have been charged at the full rate for an undisclosed dog).
Put Our Experience to Work!
With more than 12 years of experience in real estate, The Keadle Group in Charleston takes pride in helping both buyers and sellers from start to finish. We’re happy to recommend contractors, mortgage lenders, insurance brokers, and more in order to help guide our clients in the best way possible. Talk with us to see why our clients refer their friends and family to us!