When it comes to homeowners’ insurance, customers get what they pay for. This creates a huge risk potential if homeowners’ opt for less coverage to save money in the short term. By neglecting coverage needs, homeowners may find they are underinsured or lack the coverage options they need in the event of a claim. That being said, there are several smart changes a homeowner can make to their home that reduces overall insurance costs without increasing the homeowner’s risk profile.
- Improve plumbing, heating, or electrical. Upgrading home systems can net homeowners some savings because their home is less vulnerable to fires or burst pipes. Replacing all the plumbing can net up to 6% savings while upgrading electrical can pull in another two percent. Discount potential: 6-8% depending on the upgrade(s).
- Increase home security. Installing a burglar alarm or a full security system can reduce insurance premiums because it reduces the likelihood of a burglary claim. In general, the more sophisticated the system, the greater the insurance discount. However, homeowners should be sure to obtain certification proving that their alarm system sends out a signal to local police or a security company. Otherwise, insurers may not provide a discount. Discount potential: 2-5%.
- Invest in water sensors. Most homeowners’ insurance policies cover flood damage due to burst pipes. However, by installing water sensors, homeowners can detect the presence of water right away before it can cause damage. Insurers often provide a discount for this as it reduces the likelihood of a water-related claim. Discount potential: 3%.
- Upgrade the roof. If it’s time to replace the roof, homeowners should consider upgrading to an impact-resistant roof. Most insurers cover roof replacement related to hail damage so they often provide a discount to homeowners that invest in fortified roofs. Discount potential: 5-15%.
- Install a generator. Generators keep major home systems and appliances running if a significant storm knocks out the power. For example, if the power goes out during the winter, pipes may burst without proper heating. A generator can prevent such incidents and the related claims. Discount potential: 4-10%.
Homeowners can take other measures to reduce their premiums as well. Increasing the deductible is a simple way to do so, but homeowners need to be sure they can afford it first. Increasing a deductible from $500 to $1000 or even $2000 will yield significant savings. Bundling insurance policies can reduce premiums as well. If homeowners are happy with their auto insurance provider, they should see if the company also offers homeowners’ insurance and compare rates.
If you have questions or concerns about your homeowners’ insurance, The Reilly Group can help. Contact us to learn more.