But be encouraged. Real home prices. In 2021, the median home value in the United States was a record 17.1%, according to CEIC Data, a market research firm that has been tracking home prices for 30 years. This is something given that the average annual growth is 5.3%. So go ahead, celebrate your home’s stock boom, and get your happy dance out of your system, because now the bad news comes – if your home increases in value, you’re probably not a good insured.
“Besides home prices, construction costs have also gone up,” says Laura Adams, personal finance and insurance analyst at Clearsurance, an online platform that helps consumers shop and compare insurance plans to find the best value. “You are only covered to rebuild your home for the amount of coverage you have, and with increases in construction costs, many people don’t carry enough home insurance coverage to do so.”
bummer, i know. This is such a cavity. You hate paying for insurance, and so do I. The last thing you need is another problem to lose sleep. But, you wouldn’t really be happy if your house burned down and you found out that you were only covered for what you declared the replacement value when you got the policy, when the house was worth much less, and the building dollars went additionally. sigh.
However, before you dip your head into a tub of vodka, Adams has a better idea. Although you will probably need to contact your carrier to ensure that your housing coverage is sufficient to cover the full replacement value of your home, which means your prices will go up, you can also adopt some strategies to lower insurance costs.
“The price you pay for homeowners insurance depends on many factors, including types and amounts of coverage, location, and features of the home,” she says.
Then I offered the following 13 often-overlooked ways to lower the cost of home insurance, even if you need to increase your coverage:
• Replacing the old plumbing. If you update your plumbing and fix leaking pipes, you reduce the risk of significant property damage from a broken pipe. If you upgrade your plumbing, tell your insurance company.
• Replace the worn out electrical. Since degraded electrical systems are a major cause of home fires, having a new electrical system installed reduces the risk of fire, and can also lower insurance premiums.
• Get a new roof. Home damage from leaking roofs is another common and expensive claim, so insurance companies reward those with new roofs. When we replaced our worn-out roof last year, our premium fell by about 10%.
• Fortify your windows against disasters. Upgraded features, such as storm shutters and shock-resistant windows, help protect homes from high winds, hail, heavy rain, flying elements, and other damage that comes with weather-related disasters.
• Install a security system. Many smart home devices help people save money on their policies and avoid insurance claims. Among the technologies that could lead to insurance cuts are professionally monitored security systems, security cameras (including doorbells with cameras), burglar alarms and water sensors that cut off the water if a pipe breaks.
• Compile your coverage. Ask your agent about buying more than one type of insurance policy with the same carrier, or about buying what’s known as a multi-line policy. Pooling your home and auto or life insurance with the same carrier often results in significant savings.
• Check out affinity discounts. Find out if your employer or any professional or alumni organization you belong to has a relationship with an insurance company that offers a discount that you may be eligible for.
• Keep a good balance. Having good credit will save you insurance money in many states.
• Increase your discount amount. Usually, the higher the deductible, the lower the premium.
• Play the age card. Retired homeowners over 55 can qualify for lower rates.
• Do not smoke. Smokers often pay much higher insurance rates.
• married. Married homeowners usually pay less than single owners.
• Shop, then be loyal. When looking for home insurance, shop and compare plans, discounts, and rates. Once you choose an insurance company, stick with the company. Loyalty is often rewarded with lower premiums.
Marnie Jameson is the author of six books on home and lifestyle, including What To Do With Everything You Own To Leave The Legacy You Want, Downsizing The Family Home – What To Save, What To Leave, and Downsizing Blended Home – When two families become one. You can access it at marnijameson.com.