Saving on Homeowner’s Insurance
As a first-time homebuyer you may want to know that even though you have very limited control over your homeowner's insurance policy premium, you can avoid pitfalls by knowing what they are and what they do.
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Budgeting Tips for New Homeowners: 5 Things That Can Cause You to Pay More for Your Homeowner’s Insurance
If you’re a first-time homebuyer you are also likely shopping around for a homeowner’s insurance policy to protect what is quite possibly your single largest investment. Many factors go into what determines your homeowner’s insurance premium. And while you can’t control them all, just knowing what they are can help you understand how your premiums are calculated, as well as avoiding some of the potential pitfalls.
Your credit.
Some insurance companies may use your credit report as a factor when setting your homeowner’s insurance rates. The higher your credit score, the lower your rates may be. If you’re planning on purchasing a home in the near future, check your credit report regularly to identify any red flags and dispute any discrepancies.
Your pets.
Many insurers have underwriting guidelines that specifically exclude certain animal types as well as breeds. If your pet is on the “no go” list, you may be charged an additional premium, or even be denied coverage.
Your location.
If you’ve already purchased your home, then there isn’t much you can do at this point. However, if you’re still house shopping, you should keep in mind that things such as how far your home is from a fire station, fire hydrant, or the nearest city can affect your premiums. Also, homes in areas that are prone to earthquakes or in flood zones can considerably raise your rates.
Your home’s age.
The age of your home and whether or not there have been updates or home repairs in certain things such as plumbing, electrical, heating, roof, etc. can affect your homeowner’s insurance premiums. Check with your insurer to find out what you should be looking for when shopping for your new home.
Your home’s features.
There are certain feature of a home that can raise your rates, while others can actually lower them. For example, a swimming pool or Jacuzzi may increase your premiums, while adding a security system or fire alarm can offer you discounts. Check with your insurer about what discounts you may be eligible for, as well as certain features that you should avoid.