Saving money on your homeowners insurance is easy. There are a variety of different discounts available that can range from paying electronically to having a hail resistant roof. If you have had the same insurance carrier for many years, and intend to continue to renew for the foreseeable future, you may also be eligible for a customer loyalty home insurance discount.
Insurance companies spend big bucks advertising to potential new customers. In 2014, 10 of the top carriers spent over $4 billion. It takes a lot of money to convince potential customers to switch insurance companies. Often, their spending is fruitless, as customers switch from one carrier to the next, depending upon the latest deal they find online. Therefore, carriers are spending more money trying to keep current policyholders. For customers who choose to remain loyal, many insurance companies will provide discounts on their annual premiums.
According to Bill Wilson of the Independent insurance Agents and Brokers of America, “Insurers make money keeping a customer several years. It’s worth it for them to give a credit.”
The amount you can save as a loyal home insurance customer varies, depending upon the carrier. However, it typically ranges between 5 and 10 percent. This can make a significant dent in your premium payments, especially when combined with other available discounts. Often, there are certain requirements to obtaining a customer loyalty discount, including:
- Remaining with the same insurance company for at least three to five years;
- Having few or no insurance claims on your record;
- Being in good standing;
- Holding several policies with the same carrier (called bundling).
With some carriers, the longer you remain claims-free and in good standing with the same company, the bigger the discount. At one homeowners insurance company, nine years of loyalty without a single claim, plus being five years claims-free at a previous company, can net a 24 percent savings.
Different Customer Loyalty Discounts
Depending upon the insurance company, there are several different customer loyalty discounts available:
- Advanced renewal discount: Each year, your insurance company will notify you of the upcoming policy renewal date. Usually this is done several months in advance. If you intend to remain loyal to your carrier, you might be offered a discount for renewing and paying for the next policy year. For example, if the annual premium rate for the next year is $1,900, you may only have to pay $1,700 if you renew early.
- Renewal discount: Often, simply acknowledging that you plan to renew for the next policy year is enough to qualify for a discount. Depending upon the insurance company, the annual premium may have to be paid up front, rather than divided into smaller monthly payments, in order to qualify for the reduction in fees.
- Disappearing property deductible: Another way that homeowners insurance companies encourage customers to remain claims-free is with the disappearing property deductible. Depending upon the carrier, you may need to be claims-free for a specified number of years first before receiving the discount. Then, for each year that you remain claims-free, you are awarded an additional reduction until your deductible reaches zero. For example, at one of the larger carriers, the discount is an additional $50 per year.
Other Ways to Save
Aside from homeowners discounts, there are other ways to save on insurance as well. Keeping your house safe and in good condition is also important, and could reduce the number of claims you need to make. For example, you can reduce the possibility of a fire by quitting smoking, installing a fire sprinkler system, and having a smoke detector in each bedroom and on each floor. This will save you from having to submit a claim and potentially pay thousands of dollars out of pocket, plus your home remains in working order.
Speak to Your Agent
Have you been with your home insurance carrier for at least three years? Has your independent insurance agent discussed the possibility of a customer loyalty discount? If not, set up an appointment to speak with them today. They will be able to answer any questions you may have regarding the customer loyalty discount and any other discounts you may be eligible. You don’t necessarily need to shop around to reduce your bill; you could be saving money just as easily by qualifying for the right discount programs.
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