Insurance can be thought of as the expensive but necessary hassle that ensures you aren’t wiped out by an unfortunate series of events. But for those who feel helpless in the face of rising insurance rates, there are some “do-it-yourself” (DIY) actions you can reasonably and safely do around your home in order to reduce your monthly premiums.
Insurance companies don’t usually go out of their way to promote these discounts and rebates, but they can be found if you know enough to ask for them. Some can save you between 5 and 45 percent off your premiums.
Warning: Don’t Overdo It
First, let’s get some important conditions out of the way. Most homeowners policies don’t cover repairs for routine maintenance, so don’t bother trying to get reimbursed for these projects. Also, if the modifications you make are botched and the insurer is not notified, your coverage may be nullified if a loss occurs due to the repair effort.
Know When to Start
Most homeowners policies don’t cover repairs for routine maintenance, so don’t bother trying to get reimbursed for these projects
If you’re afraid of trying to make repairs on your own, remember that every time you file a claim, you run the risk of facing higher premiums. Insurance is important for major catastrophes, but your provider should only be contacted as a last resort. The couple hundred bucks you spend on your own project or the $1,000 you spend to hire a contractor are safer for your wallet than having to pay higher premiums every month for years or decades down the road. If you want to start putting money aside for household tasks and emergencies, read this post about building a home maintenance and improvement fund.
It’s important to know your policy’s deductible. This figure represents the amount of money you must spend out of pocket before insurance coverage kicks in on any claim. Most homeowners carry a deductible of between $500 and $1,000. A good rule of thumb, according to The Family Handyman site, is to not bother filing a claim until the estimated repair costs are $1,000 more than your deductible. Statistically, if you file two claims about a maintenance issue within a three-year period, you might trigger an investigation and a possible rate hike or get dropped by your insurance company. Want to get a jump on saving money as a homeowner? Trent published a list of things you should do immediately after purchasing a home.
[don’t] bother filing a claim until the estimated repair costs are $1,000 more than your deductible. Statistically, if you file two claims about a maintenance issue within a three-year period, you might trigger an investigation and a possible rate hike or get dropped by your insurance company
Step 1: For the Novice
Sometimes the most effective DIY projects are the ones that involve little or no specialized tools.
- Install smoke and carbon monoxide (CO) detectors. This one’s pretty much a no-brainer. According to the National Fire Protection Association (NFPA), having smoke detectors in your house reduces the likelihood of you or your family members dying in a fire by at least 50 percent. Besides, most insurance companies offer a premium discount of about 5 percent if you have them in your home and regularly check the batteries. While you’re at it, pick up a CO detector; this device will alert you when the colorless, odorless and lethal gas builds up in your home. In some states, CO detectors can give you a premium discount of roughly 3 percent.
- Have fire extinguishers on hand. Many people wisely keep one near the kitchen, but it’s a good idea to have at least one extinguisher for each floor of your house, particularly near hot spots like fireplaces and furnaces. Notifying your insurer about these handy tools may get you another 5-percent discount.
- Hazard detection sensors. Similar to smoke detectors, these clever little devices can be placed near furnaces, hot water heaters or other plumbing fixtures to let you know if something is wrong. If a furnace shuts off, a battery-operated temperature sensor can alert you before the pipes freeze. If a pipe does develop a leak, these devices can either sound an alarm or signal a water shut-off the moment standing water touches the sensor on the floor. Premium discounts for these devices usually fall between 2 and 5 percent.
Step 2: For the Tested DIY-er
OK, you’ve gotten your hands dirty, you’ve managed to drive a nail and turn a screw without injury. Let’s take it up a notch:
- Install deadbolt locks. Deadbolt locks are a relatively easy DIY project that can earn a small discount with most insurers. These locks are reliable, notorious among criminals, and easy to open from the inside in the event of an emergency.
- Replace washing machine hoses. Worn flexible hoses that connect washing machines to the plumbing system commonly cause water damage, according to the Insurance Institute for Business and Home Safety. By noticing when hoses get worn out or frayed and replacing them – a task that requires as little as 10 minutes – you may earn a premium discount of up to 10 percent. If you go this route, be sure to use stainless steel hoses, rather than rubber ones, which are more prone to burst.
- Add seismic braces. This may sound complicated, but it really isn’t. Most earthquakes don’t cause catastrophic damage, but they do knock a lot of larger items over, like a cabinet of fine china or heavy bookcase, which can land on someone and cause serious injury. Many of these headaches can be avoided with the installation of a few small metal brackets, straps or braces that can be found at most hardware stores. EarthquakeSafety.com also provides easy-to-follow instructions about how to better secure the frame of your house to the foundation with a few braces, bolts and structural timber. (Also see ‘A Guide to Winterizing Your House’).
a task that requires as little as 10 minutes [may] earn a premium discount of up to 10 percent
Step 3: For the Handy Homeowner
As your confidence builds, see if you can take on these projects:
- Strengthen garage doors. Garage doors are particularly vulnerable to strong winds. Up to 80 percent of claims from Florida’s Hurricane Andrew, for example, were attributed to garage door failures. Adding bracing to existing doors or replacing old doors with newer, storm-resistant ones can save you 10 percent in premium payments. If you have a $1,000 premium, payback on your investment would take about five years, according to the Family Handyman.
- Add workable storm shutters. If you live in a hurricane-prone area, installing wind-resistant shutters can save you up to 30 percent on the hurricane portion of your premium. For an average home, basic metal shutters would pay for themselves in three to five years.
- Remove trees that are too close to the house. They may be pretty and provide shade, but one strong windstorm or heavy snowfall could send that pretty backyard oak through your roof. Any work with a chainsaw requires some serious caution and protective gear, like goggles and gloves.
Step 4: For Experts Only
There are plenty of other money-saving modifications you can make — such as installing direct-wired smoke detectors and security systems, adding fire-resistant siding and replacing asphalt shingles with metal roofs — but these are likely to be enormous undertakings that are beyond the skill level of the average Joe Handyman. Fiddling around with anything involving electric wiring is like playing with fire, sometimes literally. So unless you have a degree in electrical wiring, plumbing or professional woodworking, don’t kid yourself by dabbling in it on the weekends. Trent discusses novice home repair in his post, ‘Six Maintenance Lessons I’ve Learned During My First Month as a Homeowner’.
If you do hire an outside person or firm, make sure the contractor has adequate insurance coverage before work begins and shows you proof of insurance
If you do hire an outside person or firm, make sure the contractor has adequate insurance coverage before work begins and shows you proof of insurance, such as a “certificate of coverage,” for workers compensation and contractor’s liability insurance. For a list of accredited plumbers and electricians near you, check out the search function at the Better Business Bureau website, or via your state insurance department.
Keep Your Agent in the Loop
Some homeowners get so excited about making their own modification that they bite off more than they can chew. It may start with cleaning the gutters, but that can lead to installing new drain spouts, adding a rainwater cistern and replacing the roof shingles. The next thing you know, you’ve got a leaky blue tarp over the hole where your old roof was, and thunderheads are gathering on the horizon.
So before you get any bright ideas on Saturday morning that you’ll regret come Sunday night, check first with your insurance agent and find out what your options are with discounts. The best advice is to take things slowly and leave the truly dangerous work to the professionals.
Insurance companies don’t usually go out of their way to promote these discounts and rebates, but they can be found if you know enough to ask for them