In Illinois, the average annual premium for $300,000 of dwelling coverage is $2,149. This figure places Illinois roughly in line with the national average for home insurance rates, which increase by around 7.6% each year. Consistent price hikes and rising inflation lead many homeowners to seek ways to save money on monthly insurance premiums without sacrificing the coverage they need to protect their homes and assets against costly events.
This article guides Illinois homeowners on how to lower their monthly insurance premiums without reducing coverage. However, these tips can be applied to homes in most states, many of which have experienced the same or greater yearly price increases.
Increase Plan Deductible
The most direct way to lower monthly premiums while maintaining the same coverage is to raise the deductible. The deductible is the amount that homeowners must pay out of pocket before the insurer pays out the policy. By raising the deductible, homeowners pay more in the event of a policy claim but pay less per month on their premiums.
Another related strategy is to raise the deductible selectively on separate policies. For example, while all of Illinois is impacted by storm damage-related insurance claims, 80% of earthquake activity occurs in Southern Illinois. This presents a potential opportunity for homeowners in Northern Illinois to raise their deductibles on the policies that include earthquake coverage, provided their plans have different deductibles for different events.
Bundle Multiple Policies
Policy bundles allow homeowners to maintain their coverage while lowering their premiums by consolidating providers and potentially earning discounts. With multiple policies, such as homeowners and auto insurance under one provider’s supervision, homeowners can simplify their insurance planning process.
However, combined policy prices, even with bundling discounts, are not always lower than purchasing separate premiums. Speak with an advisor to accurately compare the premiums for different policy configurations.
Invest in Home Improvements
Home insurance premiums reflect the policy provider’s confidence in the home. They consider the home an investment; the possibility of having to pay out a policy claim is their primary risk. Knowing this, homeowners can make their homes safer investments for their insurers by improving their safety and security features.
Upgrades can include new cameras and locks that secure the home against theft. Additionally, to reduce the likelihood of costly weather-related claims, homeowners can add storm shutters, stronger roofing materials, modern plumbing and electrical systems, or new foundations to protect their homes against common types of weather damage.
Improve Financial Status
When setting a homeowner’s premiums, insurers often consider their financial status as part of their risk assessment. Therefore, improving the policyholder’s finances can lead to lower premiums. Effective measures include consolidating debts, adding income, and paying off loans on time.
Prevent Claims
While insurance claims help homeowners pay for damages resulting from covered events, more frequent claims often result in rate increases. As security upgrades increase the insurer’s confidence in the home, frequent claims can reduce their confidence, even when the claims are justified.
Homeowners can prevent this by making fewer claims and choosing which claims are worth pursuing. For example, when a claim barely exceeds the deductible, homeowners may find it advantageous to pay the damage out of pocket and preserve their reputation with the insurance company.
Shop Different Providers
Different providers offer different deals on insurance premiums, including discounts for security upgrades, bundles, and home improvements. They also calculate premiums differently. Homeowners should check insurance agents, consumer guides, and online quoting services to compare rates between providers.
In addition to comparing the average cost of premiums, homeowners should also look for claim success rates and overall customer impressions. Even the best provider may not be the right choice in every homeowner’s situation.
Conduct Yearly Policy Reviews
One major mistake homeowners make is assuming that an insurance plan for the current year will remain applicable to their situation indefinitely. An individual’s insurance needs can change quickly depending on the homeowner’s asset value, financial status, home improvements, and more. Professional providers can conduct yearly policy reviews to make sure that the homeowner’s current insurance plan aligns with their current needs.
Partner with Experienced Advisors to Lower Home Insurance Rates in Illinois
As insurance rates continue to increase, Illinois homeowners seek ways to lower their monthly premiums while maintaining the same or better coverage. These strategies can help homeowners address rising premiums. However, personalized insurance guidance from knowledgeable local professionals remains the best asset for homeowners to maximize their savings.
At Pro Insurance Group, our experienced team provides homeowners in Illinois with insurance options that help them save without creating coverage gaps. Contact our team today to learn how we can identify the cause of rising premiums and customize a solution to meet your needs.