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How to Avoid Overpaying for Home Insurance as a First-Time Buyer

It is great to buy your first home, but it comes tagged with a number of financial responsibilities. One of the most important decisions often overlooked is related to home insurance. Being a first-time buyer, it may be pretty difficult to decide on various options and their respective premiums. However, doing some research and making strategic decisions will save one from overpaying for home insurance and have adequate coverage without breaking the bank.

Understand Your Coverage Needs

The first thing one can do to avoid overpaying on home insurance is by knowing what they need coverage for. Usually, home insurance covers the structure of the house, personal belongings, liability, and extra living expenses if any disaster strikes. Being a first-time buyer, it is very important that the value of your property and content which you are going to insure needs to be evaluated. The first-time buyers tend to make a mistake by buying excessive coverage or blowing up the actual value of their belongings, making the premiums larger than what it really is. So, take an inventory of your possessions. Assess the cost of the structure of your house so you buy precisely what you might need.

Shopping for Quotes

One of the best possible ways to ensure paying no more for home insurance is to actually shop and compare the prices from various companies. Rates also vary from company to company, and what you pay for depends upon many factors-location, home value, and risk factors. It does not follow that because one company has given you a quote you should rush and make a decision; take the pain to understand options available and at least get three quotes. It can be very easy with online comparison tools as you would have the capacity to compare the rate of various insurers in pretty quick time as well as comparing policies.

Consider Bundling Insurance Policies

Another way you might be able to get away from having to overpay on home insurance is by making a bundle sale for home insurance, possibly with other forms of cover, such as auto insurance. In most insurance companies, their strategy is that customers receive discounts on multiple-policy packages, by which you can save quite a considerable sum of money regarding premiums. This probably isn’t a hard sell, since you likely already have auto insurance if you’re buying your first home. Just remember to ask about bundling when you’re shopping around for an insurer so you can see the most savings.

Raise Your Deductible

Your home insurance deductible is the amount you’ll pay yourself if you file a claim, before your insurer kicks in the remaining balance. When you pay a much higher deductible, you pay a much lower premium, so it is a very wise way to save, assuming you won’t have to file any claims very often. However, it’s necessary not to forget that the higher deductible should remain within your reach in an emergency. First-time buyers need to strike a balance between savings on premium and the affordability of the deductible.

Avail Discounts

Most insurance companies have tons and tons of discounts that will slash down your premium. From safety features in your home to your profession, they give you everything. From having a home burglar alarm to smoke detectors to a fire extinguisher, discounts might be provided with some insurers, and so would those who have purchased the first time homebuyers or those who completed some recent home safety course. Be sure to ask each insurer about available discounts to ensure you’re not missing out on potential savings.

Review Your Home’s Risk Factors

Insurance companies take into account several risk factors when determining your premium. Anything from the age of your home down to what kind of materials are used in the making of it, where you reside in reference to any type of flood plains or natural disasters-even something as simple as crime rate within your neighborhood-can come into play. Your premium for that reason may become very high. Sometimes these can be defrayed by making improvements to your house. For example, adding storm windows or even a sump pump might reduce the chance of water damage and, in turn, reduce your premium.

Regularly Review Your Policy

Immediately after you have bought home insurance, periodic review of the policy will be very vital in ensuring that your needs are still catered for. Over time, you are going to improve your home, buy some other stuff, or even downscale some belongings. In such cases where either the value of your home went down or your home does not require certain coverage anymore, you could lower your premium by updating your policy. First-time buyers should set a reminder to review their policy every year or immediately after any significant change in their property or lifestyle.

First-time buyers easily get over their rush of owning a home and may tend to forget the costs of covering the home. However, with due care and some timely strategies, you can keep yourself from overpaying for the coverage. In this way, knowing your needs, shopping for quotes, considering bundling options, and taking advantage of discounts will let you assure yourself that your home insurance premium is reasonably priced but comprehensive. This would obviously also involve regularly reviewing your policy to check on any potential risk factors that would further help in getting the best coverage at the best possible price.

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