How can I save money on my home insurance?
When asked if people want to save money, not too many of them reply with “no, we have too much of it already.” Home insurance has a very large range of pricing between companies. Imagine shopping for a can of soup and having the price range from $.78 to $14.00. That’s a pretty big swing for the same can of soup! That’s how home insurance can be. The same client can have a $2000 difference between companies when I quote them. That being said, the best way to save money on your insurance is to SHOP and COMPARE! If you’ve been with the same company for 3 years or longer and haven’t shopped your insurance, you could be paying too much!
Home insurance rates are based on many things including location, credit, claims history, age of roof and age of your home etc. One big rating factor is the claims experience of your current company and how big of a presence that company has in your state. Here is an insurance basic factor; insurance companies take the premiums from all of their policy holders and put that into a pool. They use that pool to pay the claims for their policyholders which is very strictly reguilated by our state Dept. of Commerce. The Dept of Commerce requires that insurance company to keep a certain amount in that pool, based on the amount of business they have in our state, to make sure they will stay solvent in the event of a large amount of claims. Now, if there is a large storm and they pay out a large portion of that pool for the claims, they will have to raise rates to bring that pool back up. This hits companies that don’t have a very large customer base in our state much harder than larger companies.
Let’s say company A has only 100 clients in Minnesota. If those 100 customers pay $1000 per year for their home insurance, company A only collects $100000 per year in premiums. Company A’s pool would get eaten up pretty quickly. Now, Company B has 250,000 customers with that same $1000 per year home insurance cost for a total of $25 million. With a large storm, you can see that Company A would have to raise their rates substantially more than Company B to keep their pool intact.
When you do shop, combine all your insurance and shop it as a package. This is very important! Insuring your cars with the house saves you at least 15% on the home and 25% on your car(s).
To get the rates, I recommend shopping every couple of years. That’s what I love about being a broker! I have access to 40 different companies, at least 10 of them are preferred home and auto insurance companies. If one of those companies raises their rates too much, I can shop the other 9 for you to find you a better rate! I strive to make your insurance life a lot easier and save you money as well!
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