Purchasing a home is an exciting step, but the cost of homeowners insurance can be intimidating when you’re looking at the grand total. However, with just a little planning and research, you can save hundreds—or even thousands—of dollars on your homeowners insurance over the course of the year. To find the top Florida homeowners insurance companies for a cheap price, here are five tips to help you get started.
Research Homeowners Insurance Costs Before Purchasing a Home
When you’re about to purchase a home, you might be focused on getting a mortgage and signing paperwork. However, homeowners insurance costs can be just as important, especially if you’re looking at homes that are selling above their market value. For example, if you buy a $300,000 home with only $250,000 in coverage, your balance sheet could take quite a hit if your home is destroyed or damaged. You don’t want your assets dipping into negative territory—so research homeowners insurance costs before purchasing your next home and make sure it matches up with what you have saved for down payment and closing costs.
Understand the Differences Between Insurance and Market Value
One of the most important things that new homeowners need to understand is that there is a difference between market value and insurance value. In short, market value refers to how much your home would sell for in an open market while insurance value refers to how much your home would sell for when factoring in rebuilding costs (i.e., how much it’ll cost you or a private insurer to rebuild your home). While some homeowners believe that increasing their deductible will save them money because it cuts down on premiums, doing so will actually increase costs by decreasing your coverage amount. As with most policies, shopping around is usually a good way of saving money.
Maintain Good Credit Score
Your credit score can help determine how much you pay for homeowners insurance. Having a good credit score (above 700) will usually get you a lower rate, whereas having a bad score (below 580) could lead to higher premiums. If your current credit status isn’t great, consider taking steps to improve it: paying off debt, sticking with your budget, and staying consistent with your payments.
Increase Your Deductible
Raising your deductible is one of the easiest ways to save money on your homeowners insurance. You can raise it as high as you like, provided that it’s a number you’re comfortable with; however, note that a higher deductible means paying more out-of-pocket in case of an accident or emergency. If you are planning on moving anytime soon, raising your deductible may be an excellent way to trim back your monthly payments and protect yourself from making such a large upfront payment.
Shop for Insurance Quotes
One of your first steps in saving money on homeowners insurance is comparing quotes. Know exactly what you want before you call insurers—your home’s square footage, location, property value and other factors will affect how much you pay. If you’re unsure, shop around and compare what different companies charge for similar policies. Companies compete for your business and their rates should reflect that; shop around to find out which insurer offers the best deal.
With an increased knowledge on homeowners insurance, you are sure to find the top Florida homeowners insurance companies and for a cheaper price. If you need more support during your insurance research journey, reach out to a Get-a-Quote expert today. Get-a-Quote is a fantastic insurance shopping tool that provides you with that one-on-one assistance you need to succeed.
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