Recently I laid out a story that hit close to home on why you need home insurance, despite it seeming like a waste due to the limited nature of catastrophic events.
A few readers voluntarily followed up with what they were paying per month for insurance. And a few of those totals seemed pretty outrageous!
There was enough interest in the topic that I thought it warranted a chat of its own.
Any chat on the topic of home insurance costs will never be an apples-to-apples comparison, but I thought it would be interesting for readers to sound off on their personal experience.
There are a lot of variables that will alter your home insurance premium, including:
- provider: different insurance providers may offer you a different price
- geography: does your area have a history of natural disasters?
- floodplain: whether your house is determined to be in a floodplain
- scheduled property: do you have any add-on special items (jewelry, musical instruments, $5,000 carbon road bike, etc.)?
- home replacement value: what has the insurance company deemed it would cost to fully replace your home?
- deductible: what deductible amount have you chosen?
- multiple policy discounts: do you have other forms of insurance with your provider?
- other discounts: any other discounts you are receiving?
Here’s how I stack up in each of those areas:
- provider: I use Liberty Mutual.
- geography: I live in Michigan, and the natural disaster occurrence here is pretty rare, excluding occasional tornadoes. Sadly, there has bee a wave of home fire insurance fraud in Detroit has boosted home insurance costs for all Michigan residents.
- floodplain: nope
- scheduled property: this year, I wised up and removed my wife’s engagement ring, which saved me $30/year.
- home replacement value: $156,800.
- deductible: $2,500 on replacement costs, $5,000 on windstorm or hail damage. Raising either any higher would only saving me $12/year.
- multiple policy discounts: I also have my auto insurance with Liberty Mutual. This gives me a $43/year discount.
- other discounts: safe homeowner program discount (68% off premium), insurance to value discount ($26), inflation protection discount ($13), alumni discount (5% off premium), protective device (smoke alarms, deadbolts, fire extinguishers) discount ($26).
After all is said and done, I have a home insurance premium of $363 per year, which is pretty damn good compared to others I’ve seen and for the peace of mind it offers.
How you can Lower your Home Insurance Cost
Here are some quick tips on how you can drive your home insurance cost down:
- Call multiple providers for quotes. I’ve received quotes from Progressive, Geico, All State, State Farm, and Farm Bureau, and Liberty Mutual was the best. But, that doesn’t mean it is the lowest cost provider for everyone. Call around.
- See what the cost would be if you added on auto or life insurance. Check out this post on how to get the best auto insurance discounts for tips on auto insurance.
- Raise your deductible to the maximum that you could afford to lose in the unlikely event you were to have catastrophic loss.
- Ask about any and all discounts, including alumni and protective devices.
- Don’t add in expensive personal belonging unless they have a ridiculously high value and would not be covered under your personal property.
- Be proactive BEFORE you buy a house. Did you know that any insurance claims against the property you are buying can impact YOUR premium rates? These claims are included in CLUE reports. Ask the property seller for a copy of their CLUE report when you buy.
Home Insurance Premiums Discussion:
- How do you stack up on home insurance premium costs and on the contributing variables?
- Who is your home insurance provider?
- What tips do you have for lowering your home insurance premium?
I do have a tidbit of advice based on the fact that I sold insurance for a brief time. Here are some of the things I learned about insurance rates. How many claims you have on your record absolutely affects your rate for both home and auto. Another thing that can affect your insurance rates in a couple ways is the length of time you spend with an insurance company. First, it is a factor used to determine the rate and second, the longer you’re with a company the more likely you are to be eligible for discounts they give to long time customers. Another thing that affects your rate is the age of the utilities your home. Having updated utilities or a newer home can save you big bucks on homeowner’s insurance.
I will mention too that not all insurance policies are created equal. One policy may cost fractions of another but in terms of what it covers, would that yearly couple hundred dollar savings really be worth it if a catastrophe actually did happen to you? I’m just saying its worth the time to get educated about the different types of policies out there.
Happy insurance hunting!
Great tips, Molly. Thanks for weighing in. Do customer longevity discounts happen automatically, or do you have to beg for them?
In my experience you gain them automatically but it wouldn’t hurt asking I suppose. I’m sure it depends on which insurance company it is.
I regularly shop for insurance. I had my home owners premium increase by 10% a year for three years straight, without any claims. I was tired and the agent couldn’t do anything about it. So I switched and saved close to $200/yr. Now I regularly quote shop to see if what I am being charged is reasonable.
Yes, it is quite annoying when you premiums keep going up at a rate higher than inflation (particularly when the value of your home does not). Comparing is always a good strategy.
I pay $350/yr w/ Universal North America Insurance Company. Yes, I do shop around for quotes a month before renewal. It’s more labor intensive than shopping for auto ins b/c most homeowner’s quotes have to be done over the phone instead of online.
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