What are the lowest home insurance rates?

There are many expenses that come with home ownership. Some are very profitable, like updates, repairs, and additions that you can enjoy for years while they increase the value of your home. Others are going to cost you while not providing any direct benefit.

Among these costs is your insurance. While it is true that insurance should provide peace of mind, the key is to get as much peace of mind for as little cost as possible. This is done by saving money while still g

etting the ideal coverage.

Additionally, it is imperative that you do not save to the point of endangering your investment.

For instance, many people forgo flood policies so as to keep the few hundred dollars a year it would cost. After 10 years they may save $3,000 – $4,000, but then end up incurring tens times that in damage, which isn’t difficult, because when water gets into a home, it can destroy everything it touches rather quickly.

The first key – the foundation, if you will – to getting the lowest rate on your insurance policy is to follow a simple plan that is advised by the government.

Be sure to compare rates using the FREE search tool at the top of this page!

How to Get the Lowest Rate

The link provided above offers 12 ways to save on insurance. We are going to highlight 4 of them.

• Shopping around
• Adjust your deductible
• Seek out discounts
• Understand purchase vs. replacement cost

Shopping around: It’s a well known fact that if you go to three different stores you may end up with three different prices for the same item. The same thing occurs with insurance, too.

Generally, it shouldn’t, but sometimes one company views the risk of a home differently than another, an agent can accidentally quote you on the wrong square footage, and other times there is no discernible reason; the price is just higher or lower. Shopping around can pay off greatly, and sometimes you can find out that you are already getting the lowest rates, further confirming that you can trust your insurance agent.

Adjust your deductible: If you have a policy with a deductible of $1,000, the premiums are going to be higher than if you have one with a deductible of $5,000.

Many homeowners choose the low deductible option as a means of being able to use the policy without having to come too far out of pocket during an emergency. However, what they fail to realize is that if they have a $1,500 situation come up, they are going to avoid using their insurance. The same with an $1,800 one. If you fall into this category, you need to realize that you can save money every year that you don’t have damage by opting for the higher deductible.

Make sure, of course, that your deductible is not higher than you can afford. After all, if you do not regularly have more than $1,000 in your savings account, then it would be unwise to save a few bucks each year while running the risk have having to come up with $10,000 in the event that you incur serious damage.

Seek out discounts: there are discounts that many people do not get because they don’t ask for them.

While many insurance agents like to deem themselves under the title of financial adviser, the truth is that they are not advisers, but salesmen.

They need to keep bringing in new accounts so that they can build their base of residual income while replacing that which they lose.

It is not that they wouldn’t want to help you save a few bucks, but there are only so many hours in the day and if your agent has 500 active policies, he could spend the same amount of time bringing in 20 more that it would take to call every person to see if they qualify for a small discount.

Discounts include taking a driving class, having multiple products and services with the same company, and belonging to certain groups, like AARP, a union, or even a buying club. You may find yourself paying less because of one of these things.

Understand purchase vs. replacement cost: this is the biggest mistake that people make, and it can lead to financial ruin.

When you purchase your home, it was a certain price. However, to replace that same home is likely a different one. Why? It could be because your home is 60-years-old or that it was in bad condition when you found it.

Perhaps you bought a foreclosure that had been condemned. The amount you need to insure for is the replacement cost. Not doing so could leave you living in a brand new home that has less square footage and amenities than you need for your family.

Now that these four points have been covered, it is important to know that you can get a lower premium without lowering your coverage.

Getting the Lowest Rate Without Losing Coverage

Getting back to the concept of getting discounts you already qualify for, this cannot be emphasized enough. The price of asking about these discounts is a few minutes on the phone. Over the lifetime of your coverage that could be hundreds of dollars.

Consider it this way: would you make a 5-minute call if it would lead to you getting $25 every year for the next 30 years? Of course you would, but when you don’t call your agent to ask for availability of rate reductions, deals, or discounts, then you are saying that your time is too valuable.

If there are no discounts available, then you may need to spend an extra five minutes calling another insurer, or getting a few rate quotes online. If these quotes are lower, then you can bring them to your agent and let her know that if she can match it you’ll stay.

Negotiating Between Insurers

If you have a close relationship with your insurance agent, that’s great. It would be this relationship that would allow you to get the extra discount more easily. If you have an agent who feels that the relationship trumps inexplicably higher rates, then you may need to correct that assumption.

As mentioned above, you can negotiate between insurers without even talking to another agent.

You can just get some quotes online, copy the rates, and email them to your agent. From there, let him do the work of keeping you as a customer while you figure out what to do with your savings.

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