Given the nature of the insurance industry, the purpose of this article is to provide general information that can assist with reducing insurance premiums. One of the first things to consider is carrier options: this is when it is helpful to work with an independent agent. The reason for this is, often, an independent agent is going to have access to carriers that a “Captive” agent may not have. As a result, the homeowner will have access to more insurance choices which is always a good thing. How does someone know if their agent is a “Captive” agent or an “Independent” agent? One way to find out is to see how many auto carriers they represent- if the answer is only one, then they are probably a “Captive” agent. Some “Captive” agents will say that even though they write with just one auto carrier; they do have several home insurance carriers. Unfortunately, in those types of scenarios, the agents home carriers are usually limited to only a few companies approved by the “Mother Ship”. Again, independent agency means more choices for the homeowner.
Second, consider reducing some the ancillary policy coverages. These can be items like service line endorsement, screen enclosure endorsement, raising a deductible, lowering Ordinance and Law, lowering Other Structures, etc. Something that can have a larger impact on premium savings is reducing Personal Property coverage. Most carriers will allow this amount to be reduced to 25% of the dwelling amount, and still give the insured replacement cost coverage on it. Anything below that 25% mark will usually be insured at Actual Cash Value by the insurance carrier. In addition, the insured has the option to remove the replacement cost coverage endorsement from their Personal Property without lowering the overall limit of coverage. It’s important to understand that when someone removes their replacement cost coverage endorsement, their personal property is now insured at Actual Cash Value, or a depreciated amount. This means, at the time of a loss, they will get a reduced amount for their Personal Property coverage. Reducing coverage is never ideal, however, the overall goal is to find the best coverage options for the best price.
Third, a Wind Mitigation inspection with the maximum number of features listed, will also impact a homeowners insurance premium. Items such as “Single Wraps” and/or “SWR” credits will have a much larger impact on rates, than “Toe Nails” and “No SWR” coverage.
Fourth, certain construction characteristics will affect a home insurance premium as well things like roof shape. A “Hip Roof” shape offers a lower premium than a “Gable Roof” shape. In addition, Concrete block homes will be less expensive to insure than Frame homes.
Sixth, a home’s location can also affect an insureds premium. Homes that are in more rural areas will usually see a larger premium than homes closer to the city, due to the risk of fire. Homes that are closer to fire departments will usually see a lower rate than homes located away from fire departments or who are serviced by volunteer fire departments. This also carries over to where the home is located here in Florida. The closer a home is to the coast, the more expensive it will be. Vice Versa, the further away from the coast a home is located, the lower the insurance premium will typically be.
Seventh, reviewing discounts or asking the carrier to run a new insurance score can potentially save on premium. Discounts are offered for living in a gated community, being retired or of a certain age, having a monitored alarm system, being prior or current military, going paperless, having good credit, choosing one or more of the new endorsements carriers now offer for mediation and roof settlements.
One last notation that is important to bring up in the light of this article, is that homeowner’s should always consult with their agent BEFORE spending money on items such as solar panels, hurricane shutters, alarm systems, etc. Many times, individuals are led to believe they will save money on their home insurance by installing these items, but in reality, they do not end up receiving a discount OR the cost to install the item was much more than any discount benefit.
While this is not an exhaustive list of things that will help reduce a client’s home insurance premium, it should provide an idea as to some basic things that may help. Always consult with a licensed agent before making any changes to an insurance policy or quote. If you have any further questions, please reach out to us directly at www.thewelchgroup.net or call us at 727-835-1500.
