Have you opened your latest homeowners insurance renewal notice only to suffer from sticker shock? You’re not alone. Homeowners across Arizona have seen rates rise an average of 50-100% over the past year. This trend is in line with the national pattern of spiking home insurance costs, which rose 21% last year alone.
Rates are climbing due to increased extreme weather events, higher rebuilding costs, and more expensive claims for hail and flood damage. As a homeowner, these premium hikes likely have you wondering, “What can I do to save?”
The good news is that there are several ways you can help bring down the costs associated with your homeowners insurance. So, we’ve compiled five tips for easing the strain on your wallet.
1. Raise Your Deductible
Raising your deductible is the easiest and fastest way to save money on homeowners insurance.
What is a deductible? Simply put, it’s the amount you pay out-of-pocket before your insurance kicks in if you file a claim. A $500 deductible means you would pay the first $500 of any claim. After reaching the deductible, your insurance covers the remaining costs according to your policy.
You can often secure a discount on your premiums by opting for a higher deductible. Why? Because you are sharing more potential risk with the insurance company.
According to NerdWallet’s Home Insurance Rate Analysis, the average saving for increasing a deductible from $1,000 to $2,500 is 11%.* However, this figure can vary widely by location and other factors. So, play around with your deductible to see how much you could save.
A quick word of warning before jumping to raise your deductible. Ensure you have adequate savings set aside to cover the higher out-of-pocket costs if you need to file a claim. If you don’t have at least the minimum saved in case disaster strikes, you likely won’t be able to proceed with a claim.
2. Improve Your Credit Score
Insurers often use credit-based insurance scores as one factor in setting premiums. Essentially, they view individuals with higher scores as lower risk and more responsible. This translates to discounts for policyholders with good or excellent scores.
Many homeowners overlook this critical factor, and going from a poor credit score to an excellent one could save you 20-30% off your homeowners insurance. While actual discounts will vary by insurer, here are some typical premium differences:
- Poor credit (below 600): No discount
- Good credit (660-699): 5% discount
- Very good credit (700-750): 15% discount
- Excellent credit (above 750): 25% discount
Tips for improving your credit score include:
- Pay all bills on time
- Pay down balances and limit credit usage
- Dispute any errors on your credit report
- Limit new credit checks when shopping for rates
Boosting your score not only saves on insurance but also makes you eligible for better loan terms and other financial products, so it’s a win-win activity for you.
3. Install Safety Features
Adding protective devices and systems to your home can make it less susceptible to damage. This reduces risk for insurers, who often reward your safety efforts with premium discounts.
Some features that could lower your rates in Arizona include:
- Smoke detectors – Receive up to 5% off for installing these critical alarms.
- Security system – High-tech monitoring systems can save you 5-15%. Focus on ones with fire/smoke sensors.
- Lightning rods – With Arizona ranking in the top five states nationally for the most lightning deaths, lightning rod installation can mean savings.*
- Impact-resistant roofing – Materials like metal or impact-resistant shingles protect against hail storms.
Call your insurer to ask about specific discounts available, as some might not offer discounts on some of the features mentioned above. The savings can quickly offset the cost of installing small investments, such as smoke alarms and fire detectors.
4. Bolster Your Home Security
Reinforcing your home’s entry points and exterior helps reduce the risk of break-ins, falling debris damage, severe weather destruction, and accidents on your property. Adding protective measures can earn you a safer home, along with discounts of up to 5-10% off your premium.
Consider installing:
- Deadbolt locks on all exterior doors
- Burglar Alarm(s)
- Metal security frames/doors instead of wood
- Impact-resistant window panes
- Fence enclosure around the backyard
- Exterior lighting with motion sensors
- Fire-safe landscaping like gravel instead of brush
The key areas to focus your security efforts will depend on your home’s unique layout and risks. But in general, insurers reward proactive, well-documented steps taken to prevent crime, accidents, and weather destruction.
Consult with a home security professional on the best reinforcements. Then, confirm specific discounts with your insurance provider.
5. Bundle Policies
Purchasing multiple insurance policies with the same provider, known as bundling, can unlock premium discounts. Most insurers offer a break for bundling homeowners and auto insurance, while some also reward adding policies like flood, umbrella, or life insurance.
The savings will vary, but bundling can shave 5-15% off your total premiums. Opting for higher deductibles and policy limits may also make you eligible for further discounts when you bundle. Besides saving money, bundling streamlines your coverage. You’ll have just one renewal date, payment schedule, and contact point for all insurance needs.
An umbrella insurance policy can be a strategic add-on, too. This supplemental coverage kicks in after you reach the limit on your homeowners, auto, or other liability policies. It prevents gaps that could leave you financially vulnerable.
It’s best to call an independent homeowners insurance broker, such as Arizona’s San Tan Insurance, and ask about available bundling packages and discounts today. Just linking all your coverage together may add up to significant yearly savings.
These Tips Can Save Hundreds Off Your Homeowners Insurance
After seeing skyrocketing rate hikes, you probably feel frustrated and overwhelmed about your homeowners insurance costs. Just remember – you have more control than you think when it comes to savings.
To recap, some of the most impactful steps you can take include:
- Increasing your deductible
- Improving your credit score
- Adding protective safety features
- Strengthening your home’s security
- Bundling multiple policies
Don’t resign yourself to expensive premiums year after year. Reach out to an independent insurance broker to discuss available discounts and find the most comprehensive coverage at the best price. They have direct partnerships with top insurers and can offer you more choices than just dealing with one company yourself. A few minutes of reviewing your options with an insurance expert can easily save you hundreds of dollars each year. So ahead and take action – your savings are waiting!
