If you financed the purchase of your home with a mortgage loan, you have homeowners' insurance. That's because lenders won't approve you for a mortgage loan if you don't first buy one of these insurance policies. The cost of your homeowners' insurance policy will vary, depending on your home's location, size, age and other factors. Bankrate, though, reported that the average cost of this type of insurance in the United States stands at $1,428 a year for a policy that offers $250,000 in coverage.
These policies pay out if your home is damaged or destroyed by a natural disaster. You'll also receive a payout if someone steals items from your home or if someone is injured on your property and sues you for medical costs or other damages. Policies typically cover other structures on your property, too, such as sheds and garages.
Some of the factors that go into the cost of your homeowners' insurance policy are out of your control. You can't, for instance, do anything about your home's age or location. You can't change your home's style and you can't do much about its size — all factors that impact how much you pay each year for coverage.
You can, however, take other steps to help reduce your homeowners' insurance bill.
Purchase a security system
One of the easiest steps is to purchase a home security system. By investing in such a system, you reduce the odds that a burglar will break into your home. This also reduces the odds that your insurer will have to pay out to replace stolen items from your residence. Once you provide proof to your insurer that you've equipped your home with a security system, your insurance rate should dip.
Stop smoking
Smokers pay more in homeowners' insurance because they are riskier: There is more of a chance that their residences will be damaged or destroyed in a fire. If you stop smoking, your insurer will drop your insurance rate.
Boost your home's protection from natural disasters
Insurers will lower your premium if you take steps to boost your home's protection against severe storms, earthquakes or other natural disasters. You might lower your cost of insurance by installing storm shutters, reinforcing your roof or replacing your existing roof with one designed to withstand hail and strong winds.
Buy your homeowners' and auto insurance from the same company
Many insurers offer discounts if you purchase both your auto insurance and homeowners' insurance from them.
Maintain a strong credit score
Many insurers will check a version of your credit score when setting your policy's annual premiums. That might sound surprising, but insurers say that homeowners with stronger credit scores tend to file fewer claims. That makes them safer to insure and allows insurance companies to offer them lower rates.
Review the value of your possessions every year
Maybe you sold an expensive diamond ring last year. Or maybe you no longer own that rare piece of art. If so, let your insurer know. You might not need as much coverage for the items inside your home over time. Reducing this coverage will lower your overall property insurance bill.
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