5 Ways to Fight Before Your Home Insurance Pays You Out
If you feel like your home insurance premium is getting out of control, you’re not thinking things through. The numbers are stacked against you.
According to a recent study by LendingTree, regulator-approved home insurance rates will increase 45.8% nationally from 2020 to 2025.
To put that in perspective, that’s 1.8 times the rate of inflation over the same period. The pain gets worse in 2024, when home insurance rates increase by 12.5% while overall inflation sits quietly at 2.9%.
This is not just a minor annoyance. Affordability is a problem. Another LendingTree report on the stability of home insurance found that in hard-hit states like Louisiana and Arkansas, nearly 1 in 5 owner-occupied homes are currently completely uninsured. People just throw up their hands and walk away from their financial safety nets.
Lowering your coverage is a disastrous mistake. When a storm comes or a fire breaks out, you are involved in everything. A gap in your insurance history also ensures that you will pay higher rates if you try to get paid again.
Instead of surrendering to these mountains, you need to fight for yourself. Here’s how you do it.
5 ways to reduce the cost of home insurance
1. Stop being loyal to your insurance: Your insurance company is not your friend, and it does not reward you for being honest. If you let your policy automatically renew every year without making a purchase, you’re wasting money. You need to issue quotes to at least three different competitors per year to force them to fight for your business.
Here is a tool to compare quotes on home insurance.
2. Increase your deductible: The lowest deductible isn’t always the smartest play. If you have enough money sitting in one of the high-yield savings accounts to cover an emergency of $1,000 or $2,500, increase your deductible to that amount. By taking a short-term risk, you will quickly lower your monthly payment.
3. Aggressive mass: That’s personal finance 101, but a shocking number of people still buy their home and auto policies from different companies. Consolidating your coverage under one roof is an easy way to trigger a great multi-line discount.
4. Make your house harder to destroy: Insurers despise risk. If you live in a hurricane-prone area, install storm shutters or reinforce your roof. If you are in a wildfire area, upgrade to fire resistant soil.
Even a simple addition like a monitored burglar alarm or a smart water leak detector can knock points off your down payment. Make the upgrade, then call your agent and ask for a discount.
5. Check your rebuild costs: Inflation has moderated, meaning that the very high lumber and labor costs we’ve seen in the last few years are likely to be stable in your area. Review your coverage limits.
You want enough insurance to completely rebuild your home if it’s gone down, but you don’t want to pay for the excess coverage based on outdated construction rates.
Money Talks News has covered ways to lower your homeowner’s insurance significantly, but the core lesson remains the same: You have to be your own advocate.
Don’t just accept walking. Get on the phone, use the numbers, and protect your home without letting insurance companies drain your bank account.
