Four ways to lower your insurance premium

For most of us, our home is our largest and most important investment. Properly insuring that investment is a given, but there’s no need to pay more for insurance than you have to. Below, we’ve put together some tips for keeping your premiums in check while still getting the coverage you need.

1.Increase your deductible
The deductible is the amount that you must pay before your insurance kicks in to cover the remaining cost of a claim. Remember that most policies have two deductibles, one for for hazards like fire, vandalism, or collapse, and one for wind and hurricane. Options for deductibles can be dollar amounts or percentages. In general, the higher the deductible, the lower your premium. Just don’t select a deductible that is beyond what you could afford if you need to file a claim.

2. Upgrade your home
Insurance is all about risk. If you can lower your potential risk, your insurance company may be willing to lower your premium. Structural and safety upgrades to your home—smoke detectors, burglar alarms, or leak detection systems—will usually lead to discounts. In a region that experiences hurricanes or tropical storms, discount for shutters can be very significant. Closely consider the upfront cost of your upgrades, and then determine if future savings make it worthwhile.

3. Keep a good credit score
Credit scores are frequently used as reference to determine if an actual individual is a “good” or “bad” risk. Higher credit scores indicate a better (or “good”) risk, which means that keeping your score high can help in keeping your premium low. Remember that the lack of a credit score might trigger a surcharge, thereby increasing your overall premium cost.

4. Avoid small claims
Insurance is meant to be used in the case of a loss, but the more you use it, the more an insurance company will charge in premiums to compensate for the money they pay out. You’ll want to consider the total cost of a loss compared to the amount of your deductible when determining if it’s worth filing a claim. For example, if you have a $2,500 deductible and your loss is for $1,000 you will be responsible for the total cost of that loss. If your loss is $2,700 and your deductible is still $2,500, an insurance company will pay $200 above the deductible to cover the remaining amount of the loss; however, it might not be worth adding a loss to your history for such a small amount. In the end, it might drive up the cost of premiums, costing you significantly more in the long run.