#4 Lower My Costs
#4 How can I lower the cost I pay for my insurance?
You can shop around for an insurer that offers you a less expensive plan, but be sure you are comparing comparable coverages. You can increase the deductible or drop coverage on certain line items, but sure you understand the potential consequences of those decisions. Finally, insurers offer various discounts – confirm that you are getting all discounts that you can.
More Details: If you want to shop for a lower-cost policy (see FAQ #5) for tips on shopping for insurance), do that before your current policy expires. Be sure your current policy is in place until you have you have final confirmation that you have been accepted by the new insurer. Keep in mind that, although accepted by a new insurer, the policy must clear an inspection/underwriting process that usually takes 30-45 days during which your insurance can be cancelled due to underwriting issues.
Be sure you are looking at comparable coverages, requirements, exclusions, etc. A policy may be less expensive, but does it adequately protect you (see FAQ #12). If you need to give something up to get a lower cost, be sure you understand the risks. Finally, understand that you may need to shop each year, and you will lose whatever protection you might have based on your longevity with your insurer. This might include protection from a non-renewal notice.
There are a number of discounts available from insurers. Talk to your agent and be sure you are getting all the discounts you can. Examples of discounts are bundling – i.e., multiple policies with the same insurer; claim-free discount; senior discount; loyalty discount; paperless discount. There may also be discounts associated with changes to your home that decrease risk – e.g., adding a security system, a fire-resistant and/or hail-resistant roof, or doing fire mitigation.
Since the mid-90s, fire-resistant (Class A) roofs have been required in the Jefferson County foothills. If you replaced your roof with a fire-resistant roof, be sure your insurer knows. A fire-resistant roof is the single most important thing you can have to reduce the risk of losing your home in a wildfire. There are hail-resistant roofs (Class 3 or 4), and you may get an insurance discount for those. If you need to replace your roof, talk to your insurance agent first to find out the available discounts for preferred roofing materials. If there is an increased roofing cost, it may be offset by your discount over time. Newer roofs may have come with a certificate of impact-resistance; for an older roof, you may have to have it certified and weigh the cost of obtaining that certification against the insurance cost savings. Contact your roofer and ask for proof; or it might be on the building permit at the county building inspection office.
Increasing your deductible on some or all of your insured items may save you money, at a risk. For example, if you have a hail- and fire-resistant roof, you can increase those deductibles. If you drop coverage for your roof, or raise the deductible a lot, you are essentially self-insuring and betting that you will not have a claim. Be sure that you can financially afford that bet and weigh the risk against your yearly insurance savings.
Your claim history as well as your credit rating are factors that can affect your premium. Before you make an insurance claim, consider the potential impact on your premium. Keep your credit rating strong. You can check your credit rating with the service your insurer uses. (The name may be on your policy). If your credit took a hit because of a temporary event like accident or illness, the credit rating companies might adjust your rating score.