Is your homeowners insurance too expensive? Here’s what to do about it

  • Theo Thimou
  • Clark.com
12:00 p.m Tuesday, Dec. 5, 2017 Business

The year 2017 was fraught with natural disasters that cost many people dearly in life, limb and property.

Between major hurricanes like Harvey, Irma and Maria and the destructive California wildfires, insurance companies have incurred big losses.

Global reinsurance brokerage and consulting firm JLT Re estimates there were between $20 to $25 billion in losses from Harvey and another $40 to $60 billion from Irma alone, according to Florida’s Sun Sentinel newspaper.

All of that means insurance rates for homeowners are likely headed up, particularly in regions that were hard hit by natural disasters this past year.

But you shouldn’t worry if you get sticker shock when that premium renewal notice comes in the mail; you have options to hold the expense of homeowners insurance down!

RELATED: How to shop for term life insurance (and why you need to!)

6 ways to hold down the cost of home insurance premiums

Shop around

Thankfully, you can find big differences among different insurers for the same coverage if you shop around.

There’s just one caveat here: If you’ve switched insurers recently, you may not want to switch again. Having years with an insurer has value and that loyalty can sometimes be reflected in your premium.

Of course, if you find that your loyalty is not appreciated, feel free to check out the competition!

Check with your state’s insurance commissioner

Insurance is regulated at the state level, not the federal level. So before you sign up with an insurer you know nothing about just because they offer a cheap premium, you should check with the office of your state’s insurance commissioner.

Your insurance commissioner’s website will likely have a database of complaints against insurers that you can use to vet the company you’re thinking about signing on with.

Raise the deductible on your policy

Taking a higher deductible — that’s the money you have to pay out of pocket when you make a claim — will typically result in a lower premium for you. Some mortgage lenders may have a cap on how high you can set your deductible. Check with yours about any limitations.

The flip side of having a higher deductible is that if you do have a claim, there will be more initial dollars coming out of your bank account before you can get any benefit from your insurer.

Resist the temptation to lower your homeowner’s insurance

Home insurance is for catastrophic use only. So you need to insure your home for the replacement value, not the market value. If you suffer a catastrophic loss, the cost to rebuild would be far higher than what you could sell your home for right now.

That’s why you should never lower your level of homeowner’s insurance coverage!

A C.L.U.E. report can steer you away from insurance money pits

If you’re in the market for a home, ask your real estate agent to request a C.L.U.E. report from the seller.

A Comprehensive Loss Underwriting Exchange (C.L.U.E.) report is a compilation of insurance losses at a home address within the past five years.

If there’s a property you’re thinking about buying and the C.L.U.E. report comes back with a ton of claims that indicates you may be getting into a property that is an insurance nightmare — for whatever reason — and could cost you more in the long run.

Unfortunately, potential homebuyers can’t request the reports. The existing homeowner has to do it, and they can get free access to their C.L.U.E. report once a year.

Don’t just focus on premium alone

In the final summation, you want an insurer who will be there when the chips are down. So to nickel and dime yourself on home insurance in the name of saving a buck can sometimes be penny wise and pound foolish.

A couple of companies money expert Clark Howard loves that have stood the test of time are Amica Mutual and USAA.

The former is open to anyone who meets their stringent qualifications, while the latter is only open to military members and their families.

The thing with both Amica and USAA is that they may not always have the best premiums, but they routinely have the best customer service in survey after survey. And that’s what really matters when you have a catastrophic loss and need to be made whole again.

RELATED: 12 things your homeowners insurance probably doesn’t cover

Is your insurer stalling on payments? Here’s how to fight back

View full experience