Insurers estimate that over 80 per cent of residential buildings in the country are not insured. While private corporate organizations manage to take up policies to cover anticipated loss or damage to their properties, the situation with public buildings does not leave much to cheer.
However, for the few who understand the reason(s) for insuring their premises against eventualities, the cost of maintaining policies could sometimes be staggering.
However, when the going gets expensive, savvy consumers shop around for the best deal. That’s the situation many homeowners face with their homeowners’ insurance policies.
If you have more than one claim in seven years, or if you live in a flood or disaster-prone area, your insurance premiums may have increased dramatically over the past five years.
Tips for lowering your Homeowner’s Insurance Premium
You can reduce the cost of insuring your properties if you take certain steps
There are at least 10 things you can do that should help lower the cost of your policy, perhaps significantly.
- Shop around. Insurers are betting that once you have a policy, you will stick with it and never check to see if you buy it elsewhere for less. The truth is you may be able to lower your premium significantly if you shop around. Get quotes from a direct underwriter. They do their selling over the phone or over the Internet, and if you qualify, you could save big bucks.
- Raise your deductible. Some insurance companies will drop you if you make more than one claim every five years. So, think about your insurance as catastrophic coverage – and plan on picking up the cost of the everyday expenses. Raising your deductible from N3, 500 to N7, 000 might enable you to shave 12 per cent off your premium. Raise your deductible to 14, 000and your savings could be greater.
- Tout your improvements. A new roof made of a flame-repellant material might earn you a discount on your insurance premium. A new plumbing system, new wiring or a new heating system might also help you qualify for a discount.
- Get connected. A home security system might help you qualify for a small discount of three to five per cent. But connect it to the local police and fire station, and you might lower your premium by 15 per cent. A sprinkler system and smoke detectors might qualify you for a small discount.
- Grow old. If you are over the age of 55, you can probably get a discount. The same thing goes if you are retired. Apparently, the Baby Boomers are less of a threat around the house.
- Educate yourself. Your insurance company may offer an education programme or brochures that will allow you to lower your premium once you have attended a session or read the materials.
- Buy your home and auto policy from the same insurer. The cost of attracting new business is expensive, so insurers often will offer you a discount if you add policies. Some companies that sell homeowner’s auto, and liability coverage will take five to 15 per cent off of your premium if you buy two or more policies.
- Insure your home, not the land it sits on. Homeowner’s insurers will not cover the cost of your land if your house is destroyed. The premise is that even if your home is swept away by a tornado or completely devastated by a hurricane, the land will still exist. If a home costs about N5million to rebuild, but you buy a N10million homeowner’s insurance policy, the insurer will not just hand you a N5million cheque. They will simply pay to rebuild your home. So, do not pay for more insurance than you need. But one smart move might be to add building code coverage to your policy. That way, if building codes change, and it is more expensive to rebuild, you will be covered without paying for insurance you do not need.
- Stop Smoking. The Insurance Information Institute says smoking accounts for more than 23, 000 residential fires each year. So, quit. Not only will you save on your homeowner’s insurance, but you will probably save a bundle on health insurance, health-related costs, tobacco products you won’t have to buy, and clearing bills.
- Look for group coverage. Do you belong to a professional trade, non-profit, or alumni organization? These groups often offer various insurance products at a discounted price.
Are you a long-term customer? Ask for a discount. If you have been with your insurer for a long-time, be sure to ask your own insurer for some special considerations. Some companies will give a discount of five per cent if you have been there three to five years.