How to Manage Soaring Property Insurance Rates

Your life needs the right amount of work and relaxation to function well. When either one is out of balance, problems are bound to ensue. The key is finding the Goldilocks zone where you get the right amount of each.

The same applies to our expenses, including insurance premiums – if we can’t balance them, our lives might be thrown out of whack. And while you contemplate contacting a firm such as Prime insurance brokerage for a quote, it’s natural to worry about the soaring property insurance rates in the US.

Homeowners insurance is vital for protecting our most important asset – our homes. Yet, as premiums continue to rise, many of us are forced to decide how much coverage we can afford. Plus, you might wonder, “What’s causing these increases? A lot of it has to do with the fact that we’re seeing more natural disasters than ever. The several natural disasters in 2017 alone damaged property worth billions. But let’s not digress.

While we can’t control the weather or other elements, we can do a few things to manage the property insurance rate hikes. These include:

1. Shopping Around

Let’s face it; some people prefer to stick to one insurer for years. We all have our reasons, but if you’re like that, you probably aren’t getting a competitive rate. Why?

Property insurance rates can vary widely from one insurer to the next. So, it pays to shop around for the best deal. Gather quotes from at least three different insurers and compare their rates. But remember to compare apples to apples, though. That is, ensure each quote is for a policy with similar coverage levels.

Also, ask about discounts that might apply. For instance, you might also be eligible for a discount if you live close to a fire station, if you’re a retiree, or you’re planning to insure multiple homes.

Preferably, shop around annually or when it’s time for insurance renewal. This would ensure you can leverage the best possible market rate.

1. Bundling Policies

You might get a break on your property’s insurance by bundling it with other policies, such as your auto insurance. Many insurers offer up to 10% – or more – discounts for bundled policies. Hence, such umbrella policies can significantly lower your rates. While exploring such an option, compare the cost of the bundled policy with the cost of buying the policies separately before you make a decision.

1. Being Proactive About Loss Prevention

Most insurers appreciate proactive property owners and can offer a discount if you take steps to safeguard your property. As such, you might get a discount on your insurance by making your home more resistant to disasters such as hurricanes, floods, and wildfires.

Also, you could install hurricane shutters or reinforce your roof to lower your chances of loss. Similarly, installing an alarm system or taking a home-safety course could also lead to a discount on your policy. Check with your insurer to find out about applicable discounts. 

If you renovate or upgrade your home, remember to inform your agent or insurer. Usually, such changes raise your home’s value, meaning your coverage should reflect the same. That said, updating your property can help reduce your insurance costs.

1. Raising Your Deductible

Your deductible is the amount you pay out of pocket before your insurance policy kicks in. So, if you raise your deductible from $500 to $1,000, you could pay less in premiums. Of course, you’ll also have to pay more if you need to make a claim. But it’s worth considering if you have the cash on hand to cover a higher deductible.

1. Paying Your Premiums Annually

You might save on your insurance by paying your premiums annually instead of monthly. Some insurers charge a convenience fee for monthly payments, so making annual payments could help you avoid that. Plus, they could offer discounted rates for policyholders who pay an annual lump sum, meaning you could save even more.

1. Improving Your Credit Score

This might be surprising, but your credit score can impact your rates. Hence, if you have a good credit score, you could get a break on your premiums. Conversely, a low credit score could mean higher rates as you’re a higher-risk customer –  as your insurer prefers not to take chances.

If you’re unsure where you stand, get a free copy of your credit report from any of the three major credit bureaus – Equifax, Experian, and TransUnion. Check the report for errors and dispute any that you find. Also, make it a point to pay your bills on time and keep your credit utilization low. Doing so could help improve your score over time.

We can’t do much about the inevitable factors contributing to a rise in property insurance rates. But, we can mitigate the effects of increasing premiums by being smart about how we pay for insurance and manage our policies. Following the tips above, you could lower your rates and balance your budget better.