How to get the Best Rates and Lowest Prices on Homeowners Insurance
Background on how Homeowners Insurance Pricing
To understand how to get the lowest cost Homeowners Insurance, it’s helpful to understand how homeowners insurance companies price the insurance. There are two large factors that determine your rates: the first factor is the amount and type of coverage; and the second factor is the probability or risk of an event happening that causes the insurance company to have to pay on a claim. Calculating the risk of an event is complicated and involves assessing numerous hard to quantify risks, including yourself as the owner and person in the most control to prevent a claim from happening. Because of the difficulty to assess risk, the premium rates that you receive from a homeowners insurance company as they each have their own ways of calculating all the various risks.
What will save you the most money on Homeowners Insurance?
What does the complexity in calculating risk mean for you as a consumer wanting to save money on your home insurance? It means that shopping around can save you a lot of money as carriers’ varying risk assessment methodologies lead to some surprisingly large differences in insurance rates. In The Home Insurance Guide’s proprietary 2023 research we found rates for the same person in the same house varied as much as 100-200% from one homeowners insurance company to another. Over the course of a year, the choice of one insurance company over another could result in a thousand dollars of savings. This is after tax dollars!
Bundle your Home Insurance with your Auto Insurance and Save More
Insurance companies that offer both home insurance and auto insurance will reduce the overall cost when bundling both coverages together. It stands to reason. The company can get an additional sale with little additional sales & marketing costs. Also, the more relationships that a consumer has with a company, the more likely they are to maintain that relationship. From the consumers standpoint, it’s typically easier to deal with one company as opposed to two companies. So as a general matter, include your cars in your homeowners insurance quote to see if you can save even more with a combined quote. That said, there are some very good companies that focus on one type of insurance. Depending on what you are looking for, an auto policy from a Geico and a homeowners policy from Lemonade may be the best choice for you based on your needs and their offering, for example.
How to save time when shopping around to get the best homeowners insurance pricing?
Getting quotes from Homeowners insurance companies can be a time-consuming process, but fortunately that’s where The Home Insurance Guide is a very helpful resource. Our team of licensed insurance agent analysts have done a lot of the research for you. We’ve conducted extensive pricing research with different consumer profiles in different regions to see which home insurance companies provide the most affordable insurance premiums for a consumer like you. Some companies clearly provide better pricing and more affordable homeowners insurance than others. That’s a major factor in how we’ve developed the list of recommended homeowners insurance companies that you see recommended on our site. To save time and get the highest chance of finding the cheapest insurance from a highly rated homeowners insurance company, start getting quotes from best ranked companies on our list and compare the pricing you get.
In addition to shopping, what else can you do to reduce the monthly insurance premiums?
A great way to reduce the costs of insurance after shopping around is to reduce the risks that you have to cause claims. Preventative measures, like deadbolts locks on exterior doors, are a great way to do this. Fire and burglar alarm systems are designed to alert you to risks before they become claims and insurance companies factor in these systems in providing you with a quote. Those things that increase risks like trampolines and aggressive dog breeds increase your prices. Conversely, things that help you reduce the damage when a risk does happen, like home alarms, fire extinguishers and sprinkler systems, will lower your costs.
Another way to reduce cost, is to reduce the scope of coverage and or get lower coverage amounts. However, reducing you monthly premiums in this manner increases the risk to you because if something does happen you may have to cover some of the losses out of pocket. For this reason, we don’t recommend taking on more risk to reduce your premiums.
Finally, increasing your deductible can reduce your monthly premium. A deductible is the amount that you pay on the damage, loss or liability before insurance kicks in and covers the rest (or up to the policy limit). For the insurance company, the lower the deductible the more the insurance has to pay when there is an incident. Not surprisingly, insurance companies will charge a higher premium for policies that have a low deductible. Therefore, the choice is based on whether you have a preference for a lower premium or for being less out of pocket if anything does happen. If you don’t think you’ll be able to pay the deductible if something does come up, chose a low deductible plan. If you want to bet that nothing will happen and you can afford to pay a high deductible if it does, then choose a low premium plan.