Insurance companies consider numerous factors to calculate insurance premiums and determine discounts. Few people are aware of all these factors and potential discounts. Homeowners understand some discounts better than others. Below are examples of discounts many homeowners might not know.
Insurance companies reward homeowners who reduce their risk exposure. The rewards make sense since risks cost insurance carriers money. For example, smoking increases the risk of fire outbreaks. Fire outbreaks can cause damage and trigger insurance claims. Thus, you may get home insurance discounts if you don't smoke or if a smoker leaves your house.
Some insurance companies also reward effortless payments of insurance premiums. Examples of effortless payments include:
- Paperless or electronic payments
- Upfront payments
- Automatic payments
Insurance companies love effortless payments since they give the companies easy time in income projection and account management. Some forms of effortless payments, such as upfront or automatic payments, reduce the risk of a payment default.
Many people stay at home more after retirement. Staying at home reduces your insurance risks in two main ways:
- Burglars and vandals are less likely to attack occupied homes than vacant homes.
- You can easily attend to emerging threats and avert disasters if you are at home most of the time. For example, you may spot a damaged water fixture, call for repairs, and avert water damage.
Some insurance companies will reward you with a discount if you retire and spend most of your time at home.
The insurance industry is all about risk management. Low risks attract rate discounts, and high risks attract high rates. The insurance companies may not even care for the cause of the low or high risks. For example, insurance companies view some occupations (such as teaching) as low risk and responsible. You may get discounts as a member of such a profession.
Early Signing Discount
Lastly, you may also enjoy an early signing discount if you pay for your coverage before the existing one expires. Insurance companies love early signings because:
- It means you are a proactive person and may extend the quality to home maintenance
- The insurance company gets your money before it becomes responsible for your house's damages.
For example, some carriers give you discounts if you pay your premiums a fortnight before the current one lapse.
Insurance companies do not always advertise all the discounts they have. Be proactive and research for discounts to lower your insurance rates. Contact your insurance agent and ask about all the discounts you qualify for.