While insurance rates might hike with time, a few tips exist to reduce the home insurance premium. You can incorporate these to reduce the premium amount and the risk. To get you started, here are 11 simple ways to save money on your home insurance premium:
Maintain a Good Credit Score
In India, several general insurance companies consider an applicant's credit history for deciding the premium. They use a credit score to determine your home insurance premium rates. Therefore, a healthy credit score will reduce your insurance premium costs. In contrast, a bad credit score could lead to paying a higher premium or even lessen your chances of obtaining a home insurance policy. You can improve your credit score by paying your bills timely and avoiding unnecessary credit over your needs.
Raise Your Deductibles
In insurance terms, a deductible is an amount the policyholder pays from their pocket to compensate for the loss before their insurer pays for their claim. So, the higher your deductible amount, the lower your premium is. That is why your insurer recommends keeping your deductible amount high to save on future premium costs. Make sure to pay more from your pocket while raising a claim.
Invest in Home Security
Your insurer will offer a discount on a premium of at least 5% for installing security devices like high-security locks, smoke detectors or burglar alarms. Even some companies offer to cut your home insurance premium as much as 15 or 20 per cent if you have a high-security sprinkler system or fire and burglar alarm that alerts the police or fire station.
These systems are costly, and only some qualify for a home insurance premium discount. So, before buying such an expensive system, check your policy requirements and ask your insurer regarding safety systems to save on premiums.
Avoid Raising Small Claims
The homeowner insurance policy is not a home maintenance policy.The primary objective of a home insurance policy is to cover the unforeseen huge damages. To be safer, homeowners should avoid filing claims for minor repairs over a short period. Many insurers offer discounts on home insurance premiums if you remain claim-free for a few years. You can avoid raising claims by fixing things and paying for minor repairs.
Ask for About Lesser-Known Discounts
Most insurance companies offer discounts not advertised on TV or the Internet. You cannot save money until you do not know about a particular policy precisely. For instance, some insurers offer discounts to senior citizens or government retired employees, deals on newly bought homes, or discounts on paying premiums via a particular bank. Similarly, many MNCs or corporate firms also offer a discount on group home insurance policies for their employees or workers. Therefore, you should gather complete information about the procedure you seek.
Get Discounts on New House
Like a motor insurance policy, house insurance premium rates are affected by the age of the house. Insurance companies offer you lower premium rates if the home is new. New places are less likely to have household problems like heating, plumbing, or electrical circuiting. Hence, the premium for a newer place will always be lower than that paid for the antique or older houses.
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Buy Bundle Insurance Policies
You get a discount on your home insurance premiums if you buy it from the same insurer you purchased other insurance policies from. Buying both policies from the same insurance company will save 5% to 15% on your homeowner's premium. However, check if the combined pricing is lower than buying two separate policies.
Compare & Buy Home Insurance Online
Home insurance coverage may vary from insurer to insurer. It will turn into a great decision if you compare home insurance online. Check for their websites, customer feedback, reviews, ratings, and coverage for the same policy with different insurers. When you are done with your research, you get a fair idea about the range of coverage under a single policy. Also, you get an idea of how much it will cost you.
To simplify your task, you can also visit the official website of Policybazaar Insurance Brokers Private Limited. Here, you can compare multiple home insurance plans online and shop around as per requirement.
Look for Private Insurance Companies
Buying home insurance from a private insurer is much easier, and the standard policy offers more services. So, if you are currently in a government plan, you must also check the services and premium amount of other private plans.
Safe Neighbourhood Means Lower Premium
For instance, if you buy a house in a relatively safe neighbourhood with a low crime rate, you might have to pay a lesser premium. Also, ask for the names of insurance companies that offer discounted premiums in your neighbourhood. They also know the specific risks in your location. Moreover, if your house is near a fire station or police station, this might lead to offering discounted home insurance premiums.
Insure Your Valuables Sensibly
Home insurance policies offer you the option of customizing your policy to protect your precious possessions. Insure your valuables sensibly because they will decide the insurance premium amount accordingly.