It was the dead of winter, and I was standing in my new home, shivering, looking at the roof that was barely holding on. I had just bought my first house, and I was so focused on the excitement of it all that I forgot to shop around for home insurance. When a snowstorm hit, I realized my mistake. I was paying way more than I should have, and my policy didn’t even cover the damage from the storm. That’s when I decided to learn everything I could about finding the cheapest home insurance for new homeowners. Here’s what I found out.
Don’t Make This Common Mistake
My biggest mistake wasn’t shopping around. I went with the first insurance company I talked to, assuming they’d give me the best rate. But that’s not how it works. Insurance companies vary widely in their prices and coverages. You might think you’re saving time by not shopping around, but you could be costing yourself a lot of money in the long run.
Another common mistake isn’t understanding what’s covered in your policy. I learned this the hard way when my roof caved in. I assumed that all damage from snowstorms was covered, but my policy had exclusions I didn’t know about. Always read the fine print and ask questions if you’re unsure about anything.
How to Find the Cheapest Home Insurance
Shop Around
Start by getting quotes from at least three different insurance companies. You can do this online, over the phone, or through an insurance agent. Make sure you’re comparing the same coverage levels and deductibles so you’re getting an accurate comparison.
Here are a few companies known for offering competitive rates:
- State Farm: They offer a variety of discounts, including one for new homeowners.
- Allstate: Allstate has a “Claim RateGuard” feature that prevents your rates from increasing due to a claim.
- USAA: If you’re a military member or veteran, USAA offers some of the best rates out there.
Bundle Your Policies
If you’ve other insurance policies, like auto or life insurance, consider bundling them with your home insurance. Many companies offer discounts for bundling, which can save you a significant amount of money.
Increase Your Deductible
The deductible is the amount you pay out of pocket before your insurance kicks in. Increasing your deductible can lower your monthly premium, but make sure you choose a deductible you can afford if you need to make a claim.
For example, increasing your deductible from $500 to $1,000 could save you around 25% on your premium. But if you can’t afford to pay $1,000 out of pocket if something happens, it’s not worth the savings.
Understanding Your Policy
Know What’s Covered
Home insurance typically covers damage from fires, storms, and other disasters, as well as theft and liability if someone gets hurt on your property. But every policy is different, so make sure you understand what’s covered and what’s not.
For instance, some policies cover water damage from burst pipes but not from floods. If you live in an area prone to floods, you might need to get a separate flood insurance policy.
Look for Exclusions
Exclusions are things that aren’t covered by your policy. Common exclusions include:
- Earthquakes and sinkholes
- Floods and sewer backups
- Wear and tear or lack of maintenance
- Certain dog breeds (if your dog is considered high-risk)
Make sure you understand any exclusions in your policy so you’re not caught off guard if something happens.
Ask About Discounts
Many insurance companies offer discounts that can lower your premium. Some common discounts include:
- New home discount: If your home is new or recently renovated, you might qualify for a discount.
- Security system discount: Having a security system or smoke detectors can lower your premium.
- Claims-free discount: If you haven’t made any claims in a while, you might qualify for a discount.
- Loyalty discount: Staying with the same insurance company for a long time can earn you a discount.
Don’t be afraid to ask about discounts. Your insurance agent should be able to tell you what you qualify for.
Regularly Review Your Policy
Your home and your needs can change over time, so it’s important to regularly review your policy to make sure it still meets your needs. Here are a few times when you should review your policy:
- After a major life event: If you get married, have a baby, or buy a new car, it might be time to update your policy.
- After a home renovation: If you renovate your home, your policy might need to be updated to reflect the new value of your home.
- Every year: Even if nothing major has changed, it’s a good idea to review your policy every year to make sure you’re still getting the best rate.
Reviewing your policy regularly can help you avoid being over or under-insured. It can also help you catch any mistakes or omissions in your policy.
Finding the cheapest home insurance for new homeowners takes a little bit of work, but it’s worth it. By shopping around, understanding your policy, and regularly reviewing your coverage, you can save money and make sure you’re protected. And trust me, you don’t want to learn this the hard way like I did.
