Center for a Secure Retirement
5 Ways to Downsize Your Home Insurance Premium Without Having to Move

5 Ways to Downsize Your Home Insurance Premium Without Having to Move

A common recommendation for reducing the cost of home ownership, especially in retirement, is to downsize. Moving to a smaller abode allows you to lower your monthly mortgage payment, the cost of utilities and your homeowners insurance expenses all at once, but moving isn't the only way to reduce the cost of your home insurance premium.

If you'd like to stay where you are and lower your home insurance premium, here are five simple ways to downsize your insurance costs without changing your address.

1. Raise Your Deductible

Your deductible is the dollar amount that you are responsible for paying toward a loss before your insurance company will cover your claim. Having a lower deductible of $250 to $500 can make your claims more affordable, but it would also mean paying more for your home insurance premium. If you have a robust emergency fund, an easy way to lower your premium is to raise your deductible to $1,000 or more.

2. Check Your Riders

Do you still own all the expensive items covered by your homeowners insurance riders? Standard homeowners insurance may not completely cover the loss of high-value personal items, such as jewelry, artwork, photographic equipment, musical instruments or even watercraft. An insurance rider can help provide additional coverage for these items.

Don't forget to remove riders if you no longer own the items covered. For instance, if you've distributed heirloom jewelry to your family members, sold all but one of your guitars, or offloaded the boat you once kept in your driveway, make sure the riders you had to protect those items are no longer in place.

3. Protect Your Home From Fires

According to the National Fire Protection Association, U.S. fire departments responded to an average of 353,100 home structure fires per year in the five-year period between 2014 and 2018. This sobering statistic makes it clear why it's a smart move for all homeowners to make sure they have appropriate smoke detectors and fire extinguishers within their homes.

In addition, having these protective devices in your home can also save you money on your home insurance premium, as many insurers will provide a discount if you have a smoke detector and a fire extinguisher on every floor of your home. Make sure these items are well-maintained. Smoke alarm batteries should be replaced every year, and the entire alarm should be replaced every 10 years. Fire extinguishers must be inspected annually to ensure they are still in working order. Having these protections in place can give you peace of mind and improve your bottom line at the same time.

4. Improve Your Security

Making your home more resistant to burglary can also help lower your home insurance premium. According to the Insurance Information Institute, many insurance companies will offer discounts to customers who install dead-bolt locks on exterior doors and set up burglar alarms. Installing more sophisticated alarms that alert the local police department in the event of a burglary can lead to higher discounts, but even taking the simple and low-cost approach of installing a dead-bolt on every exterior door can help you save money on your insurance and rest easier at night.

5. Clean Up Your Credit

Though it may seem unrelated, having a lower credit score can affect the cost of your home insurance premium. This is because some insurance companies use what's known as the credit-based insurance score to help determine the cost of your premiums. You can improve this score in the same way that you shore up your credit score: by making payments on time, paying down your debts and maintaining a low utilization rate. Not only can this help lower your homeowners insurance costs over time, but it can also improve your overall financial situation.

Avoid Overpaying for Homeowners Insurance

Downsizing your homeowners insurance premium doesn't have to involve a smaller house and a moving truck. Raising your deductibles, cancelling unnecessary riders, protecting your home from fires and burglary, and working on your credit score can all help you pay less and feel more secure at the same time.

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