Insurance companies charge premiums based on profitability. They want something low enough that it won't scare off their customers. Simultaneously, they want something high enough that it covers the risk they'll have to pay out. You can reduce your home insurance premium by changing your home to make it less risky. The issue is that each change takes time, money, and energy. As a result, you might find it easier to choose a less risky home in the first place.
What Are Five Things You Can Target to Reduce Your Home Insurance Premium?
You might be able to get a lower premium on your homeowners insurance by considering these five factors when choosing a home:
Choose a Newer Home
Buildings suffer wear and tear. This means older homes are likelier to need repairs and renovations, thus creating more risk for insurance companies. Age can come with additional issues in some cases. Older homes might not meet modern safety standards or include modern safety technologies. Similarly, they might be more expensive to restore because they're built using skills and materials now considered rare. For a lower premium, check out newer homes.
Choose a Less Expensive Home
Insurance companies might have to pay for rebuilding destroyed homes. As such, you can expect a lower premium for a smaller home built using less expensive materials. Homeownership costs don't end with the initial purchase. Instead, you'd be wise to consider the monthly insurance payments when browsing your options.
Choose a Location With Less Crime
Some neighborhoods have higher crime rates than others. This doesn't mean you're guaranteed to be targeted by thieves and other criminals. However, insurance companies care about these numbers because they suggest increased risk. Be warned that crime rates constantly change over time. What's true now won't necessarily remain so in the future. You might find it beneficial to research trends, local initiatives, and other subjects of relevance for insight into how things could unfold. Even so, you can't be sure of predicting the future.
Choose a Location With Fewer Disasters
You can also benefit by avoiding disaster-prone areas. Sometimes, these risks are local. For example, lower ground is likelier to flood than higher ground. Similarly, properties further from fire stations have higher chances of experiencing longer-burning fires. Other times, these risks apply to the entire region.
Reach out to an insurance agent in your area to learn more about home insurance.