6 Ways Seniors Can Save on Home Insurance
Don't let soaring insurance premiums eat into your retirement income.
Alongside surging gas prices and a stubbornly high grocery bill, home insurance premiums have also been creeping up over the last few years. In the last year alone, average home insurance rates climbed 6%, according to the Federal Reserve Bank of St. Louis. That's more than double the overall pace of inflation for the same time period.
For those who are retired or near it, the idea of runaway premiums eating up more and more of your fixed income might feel daunting. Fortunately, there are steps you can take now to reign in rising rates.
From senior discounts to planning ahead for insurance costs in retirement, here are six ways to keep your premiums under control as you get older.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ask your insurer about senior discounts
You won't get a senior discount from every insurance company, but a few do offer them. The age that qualifies as "senior" will vary, as will the discount amount. But, it never hurts to call up your insurer and ask if they offer one.
If the answer is no, you can make it a criteria when shopping for home insurance ahead of your next renewal. Get a few quotes from competitors and then call up the top two or three options you like to ask whether senior discounts are available.
While you have a representative on the phone, go ahead and ask about any other discounts they offer, too. You might be missing out on some easy ones, like paperless billing discounts — a discount for opting into emailed statements instead of mail.
Look for membership-related discounts
If you have a membership like AARP, AAA or even Costco, you might be able to leverage it for lower rates. While none of these memberships provide insurance directly, all three have partnered with third party insurance providers to offer special, members' only pricing.
Rates and availability will vary depending on where your home is located. But, it's always a good idea to check what insurance-related perks any of your memberships offer.
Make home security upgrades
Boosting your home's defense systems with DIY home security upgrades – think installing a video doorbell or adding smart cameras to the exterior of your house – can help deter burglars. So, some insurers offer discounts to homeowners who have these systems.
With any of these security upgrades, the key to getting any potential discounts is to call your insurer. If you're not sure you'd want to invest in the changes if you weren't getting a rate cut for them, call the insurance company first to find out what kind of discounts are available and what criteria you'd need to meet to get them.
Pay your policy in full up front
Nearly all insurance companies will offer a 5% to 10% discount off of your premium just for paying the full amount for the year up front rather than in monthly installments. Dip into your savings to pay it in full right now. Then, pay back your savings with the monthly installments you were planning to send to your insurance company over the year.
Pro tip: If your insurer doesn't charge an extra fee for using a credit card, pay your annual premium with a rewards credit card to stack cash back or points on top of your paid-in-full discount. Just make sure you have the cash on hand to pay off the credit card in full right after.
Include higher deductibles in your retirement plan
You don't have to be over a certain age to enjoy lower premiums in exchange for agreeing to higher home insurance deductibles. But, when you're living on a fixed income, it can be hard to have that kind of flexibility.
If you plan ahead, however, it can be a great way to lower your monthly bill while still protecting your home from catastrophic losses. With this strategy, you're basically agreeing to only use home insurance for major disasters – damage where the repair bill would irreparably hurt your retirement savings.
If you can plan ahead to set aside a healthy home maintenance fund to cover higher deductibles, you'll have enough savings to cover small to medium repair jobs as they happen without needing to make a claim. Then, set your deductible as high as you can comfortably afford and enjoy both the discount from having higher deductibles and from being claim-free for longer periods of time.
Check insurance rates before you downsize
Whether you're dreaming of moving to popular retirement destinations like Florida or Colorado or you're choosing a new state for other reasons, make sure you check average home insurance rates before you move.
Even if you're using your equity to pay for all or most of your next home in cash, your savings from ditching a mortgage could be all but erased by a $10,000+ home insurance bill.
But even in states with notoriously expensive home insurance (like the aforementioned Florida), premiums vary widely from one county to the next. So, you don't necessarily have to give up your retirement plans. You just need to do your research first to pick a location that fits your budget as well as your lifestyle.
Related content
