How to Save Money on Your Home Insurance in Colorado
Homeowners insurance costs are on the rise here in Colorado. The main reason is the horrendous weather-related payouts the insurance carriers are experiencing. They look at several factors when pricing your insurance policy. I’ve listed the main factors below. A review of these items with your agent is a good idea to make sure you are getting the appropriate coverage, but….at the lowest rate.
Don’t forget that you don’t need to insure your land, only you’re the structures on the land.
Increase Your Deductible - is the portion of the claim you must pay before the insurance company will pay the remainder. I tell clients to choose the highest deductible they can pay ‘at a moments’ notice. Losses occur at the most inopportune time, so you’ll have to come up with this amount quickly. Carrying a higher deductible (which you may never have to pay) will save you money over time. The average homeowner has a claim once every 10 years.
Chose your home location wisely – Where your home is located (geographically) will greatly affect how much you pay, usually depending on the types of weather the area incurs and the potential damage that weather can cause on a home like, hail, wind, fire etc. If you want to save money on homeowner’s insurance, don’t live in the mountains, near a body of water, high wind areas, etc.
Clean up your Credit Score - In the State of Colorado it is legal for the insurance company to use a credit score as price component. Insurance companies have determined that credit scores are a predictor of future claims activity. This factor was very debatable during the first 10 years that carriers started using it to price policies. But time has proven that overall…people with better credit experience less home insurance claims. Therefore, insurance carriers give lower rates to people with higher credit scores.
Note: The law does not allow an insurer to use your credit history as the sole factor in determining your premiums. Your credit score can, however, be used against you to decline coverage or as one of several factors used to set your premium.
Multi Policy Discount - Almost all insurers will give you a discount on your premium if you purchase insurance for both your home and your car from them.
Paid in Full Discount – Almost all carriers offer a discount if you pay the full policy cost up front. Most will even charge you an additional processing fee for any additional bills they have to generate.
Miscellaneous Discounts – Every other carrier has smaller discounts available for various things such having a central alarm, good student, accident free. Make sure to ask your agent or carrier what other discounts are available (and that you are eligible for) that you aren’t currently getting.
Dwelling Amount – is the limit of money payable to replace your home in case of complete destruction. This figure should be calculated using your homes reconstruction features input into reconstruction software used by contractors. This amount of coverage is the main driver of the policy cost. Don’t be tempted to skimp on this coverage to save money. You’ll face financial devastation if your home burns to the ground.