10 Best Times to Shop Homeowners Insurance

Before starting your homeowners insurance journey, you should know the best times to shop for home insurance. It isn’t always the best time when you buy a new home. There are many advantageous situations under which you can save on premiums, and may want to have a current policy re-evaluated by your agent.

Whether you’re a new or existing homeowner, knowing the best time to evaluate your current policy and perhaps buy something else if you need could save you a bundle in premium payments over time.

When your credit has recently improved

Understanding how insurance carriers use credit to evaluate risk and determine rates is probably one of the most important things you can understand when shopping for homeowners insurance.

Your credit score is a huge factor in your insurance rate. Most carriers use credit to evaluate risk and every carrier has a different method of coming up with your insurance credit score. For example, Safeco will assign a score of 1 through 100,  with 10 and under the best possible insurance credit score. 30 – 50 is a standard score and over 50 would be considered non-standard rates – i.e., higher rates.

Nationwide, however, uses a score range of letters and numbers, so their scoring methodology can be a little trickier for even agents to understand.

Combined score vs head of household

Carriers also can use the insurance credit score of the head of household, or they can do a combined score – for example, Safeco only uses a head of household credit pull as Nationwide utilizes combined credit to determine rates.

If a carrier only uses the head of the household in one insured’s credit score, it’s advantageous to list the insured with the best credit as the head of the household. For example, if a husband and wife were looking to shop there home insurance and the wife had excellent credit while the husband doesn’t, it makes practical sense to list the wife as the head of the household.

When you have made recent updates – roof,  mechanicals, etc.

Carriers like to see that you’re updating your home. It tells them that you are a responsible homeowner with a sense of pride in your home and property.

Some of the biggest updates carriers like to see are to the:

  • Roof
  • Plumbing
  • HVAC
  • Electrical Updates

Some insurance carriers require that you have these things updated, especially on older homes. Not having these things updated can even cause the carrier to not write new business with you – i.e., not give you a policy.

You may also get a home discount for going green! Whether it’s solar panels or updated green living improvements made to your home, carriers do like to see you’re getting with the times when it comes to repairs and improvements.

Don’t forget to update the reconstruction cost if you add upgrades.  Learn about how more about how much home insurance coverage you need here.

When claims are older than 5 years

Carriers go back and look at claim history on what’s called a CLUE report over the past 5 years. Any claims that have been over 5 years old will not earn you a surcharge from your carrier.

Some carriers only go back 3 years on your claims history without a surcharge but those carriers are far and few between. Several years ago the 3-year lost history used to be more common.

When you add additional lines of business

When you add additional lines of business to your household such as adding a home or an auto with the same carrier which is known as bundling, you can get discounts of up to 20-25%! This depends on the carrier, so if you buy a home, make sure to check your auto carrier to see what kind of deal you can get if you bundle. Buying a home is a good time to have an agent shop your entire household to see what kind of deal you can get.

When you get married

Getting married doesn’t necessarily add any discounts, but it will mean multiple lines of business and bundle discounts. When you marry, you may end up adding a home to your auto policies, which will get you an home or auto discount.

Another reason it’s good to shop when you get married is combined credit. We touched above on your combined scores versus head of household scores, and how carriers evaluate credit to come up with rates. Getting married is the perfect time to shop home insurance for better rates, especially if your credit is getting a boost.

When you change jobs – affinity discounts

Some carriers offer discounts based on occupation. These are called Affinity Discounts – for example, teachers, nurses, and anyone in the service industry could potentially qualify for an occupational discount.

When you have a captive agent

A captive insurance agent can only shop through one insurance company. They’re contractually obligated to only quote products from the carrier they represent. Some examples of captive agents are State Farm, Farmers, Allstate, and American Family.

It’s very difficult for captive agents to compete and find the best prices and products for their insurance. I was a Farmers Insurance agent for over 8 years and  I left to become independent so I could sell products from any carrier I choose and I’m contracted with. Independent agents will represent and have a selection of some of the best home insurance companies. It allows me to give my customers more choices, and find them better prices.

On a renewal, if the premium has increased over 15%

Loyalty works both ways! We like to be loyal to our insurance carriers, and we want them to be loyal back to us with steady rates. We have a typical rule of thumb: If Carrier A increased your renewal over 15% and you have no claims, then we’ll probably shop your coverage with our other carriers.

When you pay your mortgage off

Some carriers offer a mortgage-free discount. This can help older people save on their insurance after their homes are paid off. Though this discount is typically small, it could decrease your overall home insurance cost.

8 days before a renewal

Carriers today offer something called an Advanced Shopper Discount, which you’re eligible for if you shop 8 days before the effective policy date.

The biggest problem with the Advanced Shopper Discount is it typically falls off on renewal –  so it’s a one-time discount for moving to a new company. If the carrier takes a rate increase and you lose your AdvanceD Shopper Discount, you can see big hikes in your home insurance premiums.

Conclusion – How to shop for Homeowners Insurance?

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