It will be tougher for you to switch carriers so follow the three steps below to make sure you have what you need from your current insurer.

1. Confirm you are not underinsured.

2. Avoid filing small claims.

3. Raise your deductible.

Following these three tips will reduce your odds of being canceled, ensure you will be paid fully when you have a significant claim, and keep your premium low.

Confirm you’re not underinsured

Many people insure their house for too little. This can happen because the insurer quoted you too low a value to keep your rate down, because you forgot to tell the insurer you made renovations that increased its value, or because inflation has made repairs more expensive.

Whatever the cause, if you are underinsured the insurance company won’t pay you enough to fully rebuild your home. While estimating replacement value is more art than science, you want to have enough insurance to comfortably cover the cost of construction if you were to rebuild your home from scratch.

While this may raise your premium some, it is more than worth it and we have tips below to save you money.

Avoid filing small claims

When insurers are losing money in a state, they tend to be quicker to cancel customers who have claims. A rule of thumb is they will cancel someone who has two claims within five years.

While this is uncommon (the majority of homeowners have no claims over ten years), you should consider whether it is worth “using up” a claim if it’s for a small amount.

The worst thing that can happen is you file a claim for say $3000 and then two years later have a $100,000 claim and get dropped afterwards. In this market, it will be difficult to find new coverage with a large recent claim and a second smaller claim in a short period.

Thus, it’s probably a good risk/reward to self insure for small claims up to your financial capacity to afford paying on your own.

Raise your deductible

If you choose not to file smaller claims, then there is no reason to have a $1000 deductible. Low deductibles are very expensive and you can save a lot of premium by taking your deductible higher.

For example, raising your deductible to $5000, can often save 20+% on your premium.

If you’d like an estimate of how much raising your deductible may save you, try our Deductible Calculator. It is a very conservative estimate of when it makes sense to increase your deductible based on your odds of having a claim in the future.

Have questions?

If you have questions about what the right deductible level is for you or want a second opinion on your insured value, reach out to us by signing up for the free Policy Review in the top right corner.