You might be thinking, “Why have my premiums gone up” or “What possible reason would be for such high premiums?” . There are only two possibilities, that can cause your premiums to rise up. One of the reasons could be that your state has revised the rate plan for the year and increased the premium or else the other possibility is you. Premiums are dependent on your track records for example your medical record, car driving record and etc.
Basic Reasons That You Could Do To Make Your Premiums Go Up:
Depending upon which insurance you’ve bought, the insurance company calculates your premiums. Insurance companies use statistics to calculate the cost and probability of an event. Insurance companies also predict how likely a customer files a claim, higher the probability, higher the insurance premium.
High Claim record:
If you have a history of claims than you are more likely to do them in the future as well. Comprehensive Loss Underwriting Exchange also known as CLUE is a way through which home insurers share information of the past seven years of claim record of a client. If you have a high claim record then you would also have a high insurance premium.
The place you are living in also plays a major role in the calculation of your premiums. For example if you are living in a less busy city with a honda accord than per say your premium is $360 . If you shift with the same car , even if its a few miles away, but is a part of a busy city, then you would have to pay premiums high to $1500.
If you have a previous record of violating driving rules, or have been into a car accident, then it’s possible that you will need more medical coverage by your auto or home insurance. Hence,in such a case you will have high premiums.
There are many more things that are considered while calculating your premiums, In short an insurance company looks for the probability that an incident may occur.
How To Reduce Your Premiums?
Raise your deductibles:
Deductibles are the amount of money that you pay before your insurance company kicks in. If you raise the amount of deductibles you will pay incase of any incident then the premium to your home insurance, auto insurance, rentals insurance etc will reduce.
Increase Home Security:
Increasing the security of your home will decrease the possibility of any incident at your home, hence you can get a reasonable discount in your home insurance policy. If you add certain security devices to your home, your insurance will go down.
For example, adding a smoke detector can give you a discount of 5% and adding a proper verified company sprinkler and a proper fire and burglar alarm that rings the police, fire brigade or other monitoring stations can get you a 15-20% discount .If you use security locks such as dead bolt locks , it can also get you a minimum discount of 5%.
Before buying such a system, you should look into the details of your insurance company, to which brand it refers or see if its worth the investment by looking how much you would save on the premiums.
Make Your Home Disaster Resistant:
You should look into ways of making your home more resistant towards windstorms,tsunami,floods, earthquakes etc.Making your home less prone to damage will reduce the cost of your premiums as the chances of damage are reduced.
First, you should find out through your insurance company what steps you should take to make your home more resistant to perils. Basic ways of doing it are by adding Storm Shutters, reinforcing your roof by buying stronger roofing materials and by improving your heating, plumbing and electrical systems to avoid any risk of damage.
Stick To One Insurance Company:
If you buy all your insurances for example your home insurance policy, auto insurance etc from the same company then you are expected to have a minimum of 15 to 20% discount in your premiums. Just make sure that the cost combined is less than what you are getting on buying both the policies from the same insurer.
Another innovative security technology is geofencing. Geofencing creates a virtual security bubble around your house. Whenever you are away from your house and there is any movement inside your home, you will be notified on your phone about it.
Solar Power Integrations
You can save money by installing solar powered lights and camera as this will not only save
energy, it will also be a great way to earn tax credits.This how you can save on your premiums!
Annually Pay for your Insurance policy:
If you choose the option of paying annually instead of monthly it can reduce the amount of premiums in total. Before opting for such an option, look into the details of your insurance policy thoroughly.
Avoid Over Insuring:
While signing for an insurance policy, you should properly look at what amount of cover your home require. Most insurance companies offer many coverages that may not be fruitful in your position. Avoiding over-insuring can reduce the amount of premium you have to pay, as lesser the coverage, lesser is the cost of the premium.
Insulate water pipes
Pipes can be damaged when they freeze then thaw. Insulating or lagging pipes can help prevent them from freezing in the first place, which reduces the risk of them bursting and flooding your home. ‘Escape of water’ is one of the most common reasons for home insurance claims.
When looking for an insurance policy, you should search in detail to find the best economical policy for you with less premium. Insurance policies should always be signed keeping in view the annual payments, this is how you can look at what amount of coverage you need for your case. If you maintain your track record and keep a reliable record then your insurance policies will also demand reliable premiums.