On average, homeowners pay $1,854 per year for insurance to cover their houses, according to a Forbes Advisor analysis. That’s a significant impact on your budget, which is why it’s normal to look for ways to lower the cost.
If you’re wondering whether you Can You Negotiate a Homeowner Insurance Quote and if there’s anything else you can do to reduce the price, here’s what you need to know.
Can You Negotiate a Homeowner Insurance Quote?
Generally, negotiating homeowner insurance quotes isn’t an option. Insurers use specific calculations to determine the pricing based on the overall risk level. Many companies use proprietary formulas to assess risk. However, others rely on algorithms that use artificial intelligence and machine learning to set premium prices.
Once an insurer does a calculation based on accurately provided information from you, the price on your quote is relatively rigid. But that doesn’t mean there aren’t steps you can take to secure a better price; it just doesn’t involve negotiating.
Also read: Under Which Circumstance Would Someone Need Disability Insurance?
What Else Can You Do to Lower the Rate?
While you can’t usually negotiate the quoted price directly, there are several strategies you can use to lower your homeowner insurance rate:
- Adjust Your Coverage: One way to lower your premium is by adjusting your coverage. This might mean reducing the amount of coverage you have or raising your deductible. However, it’s important to remember that doing this can increase your out-of-pocket expenses if you ever need to file a claim.
- Shop Around: Not all insurance companies use the same formulas to calculate premiums. By shopping around and getting quotes from multiple insurers, you might find a lower rate for the same coverage.
- Avoid Unnecessary Claims: Avoid filing claims unless absolutely necessary. Each claim you file can increase your premium. By minimizing claims, you can keep your rates lower.
- Improve Your Credit Score: A higher credit score can lead to lower insurance rates. Insurers often consider your credit score as an indicator of financial risk. A better score means you’re viewed as less likely to file claims, which can result in lower premiums.
- Explore Discounts: Many insurance companies offer various discounts that can lower your rate. It’s worth asking about all the available discounts to see which ones you qualify for.
Common Types of Discounts
Homeowner insurance companies offer a wide range of discounts to customers. Some are based on the features of the property. Others are provided based on details about the policyholder, such as their age or occupation. Here are some of the most common discounts you might be eligible for:
- Multi-Home: If you own more than one home, insuring them with the same company can result in a discount.
- Multi-Policy or Bundle: Bundling your homeowner insurance with other types of insurance, like auto or life insurance, can lead to savings.
- Fire Prevention: Having fire prevention measures like smoke detectors, fire extinguishers, or a sprinkler system can reduce your premium.
- Break-In Deterring: Installing deadbolt locks, burglar alarms, or other security measures can lower your insurance costs.
- Security System: A professionally monitored security system can provide a significant discount.
- Loyalty: Staying with the same insurance company for several years can earn you a loyalty discount.
- New Customer: Some insurers offer discounts to attract new customers.
- Occupation-Related: Certain occupations, such as teachers or military personnel, may qualify for special discounts.
- Pay-in-Full: Paying your annual premium in full rather than in monthly installments can save you money.
- New Construction: Newer homes often qualify for lower rates due to updated building codes and materials.
- Senior: Seniors are often eligible for discounts as they are considered less risky.
- Claims-Free: If you haven’t filed any claims for a certain period, you may receive a discount.
- Gated Community: Living in a gated community can reduce your premium due to lower crime rates.
- Neighborhood Watch: Participation in a neighborhood watch program can lead to a discount.
- System Upgrade or Renovation: Upgrading your home systems (e.g., electrical, plumbing) or renovations can reduce your risk and lower your premium.
- Disaster Preparedness: Taking measures to prepare for natural disasters can earn you discounts.
- Online Quote and Purchase: Some companies offer discounts for getting a quote and purchasing your policy online.
- Autopay: Setting up automatic payments can sometimes reduce your premium.
In some cases, insurers apply discounts to homeowner insurance quotes automatically based on information they have about the applicant and the house. For example, since applicants provide birth dates on their applications, a senior discount is typically applied without further action on the applicant’s part.
With others, customers have to request the discounts explicitly, as the insurer won’t inherently know who’s eligible. For instance, you might need to mention that there’s a neighborhood watch in your area or that your roof is newer in order to obtain these discounts.
At times, applicants need to submit proof of eligibility for a discount to an insurer. For example, if you’re asking for a military discount, you might need to provide proof of your service. If documentation is required before a discount is applied, the insurer will let you know what to send to make sure you get the deal.
Conclusion
While you may not be able to negotiate your homeowner insurance quotes directly, there are plenty of strategies you can use to lower your premiums. By understanding how insurers calculate your rates and taking advantage of discounts, you can find ways to make your homeowner insurance more affordable. Always remember to shop around and compare quotes from multiple insurers, and explore all available discounts to ensure you’re getting the best possible rate.
