With the impact that inflation is having on the cost of necessities, more and more people are starting to feel the pinch when budgeting each month. If you are looking to reduce your monthly expenses, your homeowner's insurance coverage could be a great place to start. This is because, with the help of the three tips below, it is often possible to lower the cost of your homeowner's insurance without compromising your coverage in the process.  

Tip #1: Don't Confuse Rebuilding Costs With Resale Value

The maximum amount that a homeowner's insurance policy will typically pay out is the cost of rebuilding your home if it is destroyed beyond repair. Unfortunately, many homeowners make the mistake of confusing rebuilding costs with resale value and end up paying for more coverage than their policy will ever pay out. This is because the resale value of your home includes the value of the land that your home is built on. Even if you are forced to rebuild your home, you will not need to replace the land that your home is built on. Consequently, your rebuilding costs will be lower than the resale value of your home. If you are carrying enough coverage to cover the resale value of your home, you are paying for more coverage than you need. 

Tip #2: Avoid Filing Claims For Minor Damage When Possible

Many insurance companies reward you with a discount on your homeowner's insurance policy if you go for an extended period of time without filing a claim. On the flip side, you may see an increase in your rates if you do decide to file a claim. While some claims cannot be avoided, you may be able to avoid filing claims for minor damage. Choosing to pay for minor damage out of your pocket can help you to lower the cost of your insurance coverage in the long run.

Tip #3: Always Choose The Highest Deductible That You Can Afford

The amount of your deductible is directly linked to the cost of your homeowner's insurance each month. The higher your deductible is set, the lower you can expect your premiums to be. That is why it is always a good idea to set your deductible as high as you can afford. While it is true that a higher deductible will mean a higher out-of-pocket expense when filing a claim, most homeowners will not need to cover this expense frequently. Consequently, the savings you enjoy from choosing a higher deductible will typically outweigh the increased cost that comes with paying this deductible. 

Contact a local insurance agency, such as Ronald H. Krupa Insurance Agency, to learn more.