Shopping Your Home Insurance Once a Year: A Calm Step-by-Step Guide
Home insurance is one of the bills that often creeps up quietly. The renewal notice arrives, the price is a little higher, and most of us just pay it. This short guide shows a calm way to check your policy once a year. A lower premium could help free up room to cover another bill, though what you save will vary by company, state and home, and there is no guarantee you will save anything.
Step 1: Read your renewal notice
Find your current policy or renewal notice. Write down three things: the yearly price, the deductible (what you pay first on a claim), and the coverage limit for your home. The National Association of Insurance Commissioners (NAIC) suggests reviewing your homeowners coverage every year, and especially after remodeling, buying valuables or adding security equipment.
Step 2: Know what you are comparing
A cheaper price is not always a better deal. Two things to check:
- Replacement cost or actual cash value. Replacement cost pays to replace a damaged item with a similar new one. Actual cash value subtracts depreciation, so it usually costs less in premium but may pay less on a claim.
- What is left out. Most homeowners policies do not cover flood or earthquake, which are bought separately, according to the NAIC.
Step 3: Ask about discounts
The NAIC and the Utah Insurance Department list common discounts to ask about: insuring your home and car with the same company, smoke alarms, dead-bolt locks, security systems, and memberships such as AARP. United Policyholders also notes that some companies give age-based or claims-free discounts. Ask each company which ones you qualify for. One third-party estimate cited by United Policyholders puts savings from bundling at up to 20 percent, but your result may be much smaller.
Step 4: Think carefully about the deductible
A higher deductible usually lowers the premium. The NAIC suggests asking what changes if you move from a $250 deductible to $500 or $1,000. Pick an amount you could actually pay if something happened. Saving a little each month does not help if a repair bill would be a hardship.
Step 5: Get two or three quotes
Call your current agent or company first and ask for a review. Then ask one or two other companies for a quote on the same coverage so you can compare fairly. United Policyholders suggests checking a company’s complaint record with your state insurance department before you switch. You can find yours through the NAIC’s list of state regulators. Do not cancel the old policy until the new one is in place.
Keep a record
Write down the old price, the new price and the date. If you save money, add it to your monthly bill list. Our guide on tracking progress and picking the next bill shows how.
More on Replace a Bill
- Shopping Your Car Insurance Once a Year: A Calm Step-by-Step Guide
- Calling Your Provider to Ask for a Lower Bill: A Simple Step-by-Step Guide
