One of the best reasons to deal directly with an insurance broker instead of dealing directly with an insurance company is a broker can give you tips for saving money on your policy and ultimately switch you to a cheaper policy with a different company if it can be found.
who handles personal insurance at First Foundation offers these general tips for both current and prospective clients.
1. Perform a Home Value Review Once Every Few Years
Do a review of the insured value of the home every two or three years to ensure its value is correct. Each year on renewal the insurance company increases the value for inflation. If the value has not been reviewed in five years, it could increase to the point where it may be over-inflated. This review ensures that you’re not over-insuring your home.
2. Choose a Larger Deductible Within Your Comfort Zone
A standard homeowner’s policy deductible is $500. All insurance companies offer around a 15% discount on the premiums by increasing the deductible on the policy to $1000, even more if you increase it to $2500. This change is all based on the comfort level of the client. Some will not put a claim through for a small amount of $1000, they will just repair it themselves. In that case, the higher deductible will pay off, and will only come in to play for larger claims.
3. Consult With Your Broker Before Putting in a Claim
The broker will look at the policy deductible, the approximate value of the claim, and then coach the client on how to proceed. A lot of times, a home policy will have a 15% discount on the policy for being claim-free. If you put in a claim for damages of $2000, you pay the deductible, and then lose the claim-free discount going forward. That 15% discount will not come back for around 5 years, so not only is the client out the deductible, but they are paying higher insurance premiums for a long time. If you both feel the claim is justifiable, a broker can help you cut through red tape and make sure claim forms are filled out properly.
4. Tell Your Broker About Renovations and Updates on Older Homes
If a home is over 25 years old, it is time to find out what maintenance things have been done to keep the home in good order. The main points for review would be to find out the following:
- When was the furnace replaced?
- When was the hot water tank replaced?
- When were the roof shingles replaced?
- Have there been any updates to the electrical breaker box and wiring?
- Have there been any updates to the plumbing? Any pipes replaced?
By providing details on these updates, you can prevent older home surcharges, as well as ensure all proper coverage remain in place with no restrictions. In some cases you may even earn additional discounts for important renovations such as replacing knob and tube wiring and upgrading electrical systems. Insurance companies will often charge a much higher premium for homes with outdated electrical systems, if they agree to insure them at all.
5. Install a Security System
Install an alarm system that monitors for both burglary and fire. Once it is activated, the broker will ask for an alarm certificate, and then be able to provide up to a 15% discount. While it won’t exactly pay for the installation and the subscription fees for alarm monitoring, it will keep you and your home safe and secure and make a dent in your premiums. Some of these systems also have convenient home automation available as an option, with features like being able to turn appliances and lights on and off, control the temperature in your home, and notify you when children have returned home from school.
6. Sump Pump Discounts
Let your broker know if you have a sump pump or a back flow valve installed in the main sewer line. Some companies will offer a small discount to prevent sewer backup. If you are looking to install a sump pump in your home, here is a video on how to do that yourself!
7. Good Credit Discounts
Ask your broker about companies that offer a credit score discount. This is meant solely for a discount purpose, and will never penalize the client. The insurance company will check your credit and offer a discount if you have the required score.
8. Non-Smoking Discounts
We have already outlined the negative impacts of smoking in your house, here this is the other side of the coin. If you are a non-smoker, you can let your insurance broker know and they may be able to give you a small discount with some companies.
9. Bundle Insurance Products With One Company
Combine all your insurance products with the same insurance company. This will generate discounts for both your homeowners and auto policies.
Of course each situation will be unique, and some of the suggestions Marit makes will work for some while they won’t work for others.