Hey Austin. I’m an independent insurance agent here in Austin and have been in the industry for 12 years. With the rising costs of insurance, Travis & Williamson Counties have experienced substantial increases since COVID. The average home insurance premium in these counties in 2020 were around $1200, but now the average is up over $2800 due to building material & labor cost increases and frequency of weather claims over that time. Some are paying much more, some are paying less. However, I’m here to just leave some tips on how you as a homeowner in the area could save some money on your home insurance.
I know insurance is a hot button topic, so I want to lay some expectations. I’m not here to discuss the insurance industry as a whole, explain market conditions, address personal experiences that you may have had dealing with insurance, or comment on what I think of certain carriers. I know people have opinions on insurance or have had confusing situations in the past, but that’s not what this post is for. All I want to do is give Austin homeowners some tips to lower their costs, from an industry veteran’s perspective.
Not all of these tips are going to apply to you, and I’m sorry for that. I can’t address all the potential possibilities, but I’m going to do my best to drop some tips that affect the most number of people. If you think the tip is silly, or wrong, then that’s cool.
Okay, in no particular order, I’m just going to start dropping tips as they come to my head.
** #1: Roof Replacement.** Lots of people had their roof replaced since the hail storm in September 2023. Something you should know is that your insurance carrier’s service department and claims department don’t usually talk to each other. So, there’s a real possibility that the service department has no idea that your roof was recently replaced. If you had your roof replaced, reach out to your agent or service department and confirm they have the updated info. If they don’t, ask them to update it and provide them whatever information they require. You could potentially see a significant reduction in premiums here.
#2: Shopping Annually. About a month before your upcoming policy renewal, your current carrier will send you the renewal documentation for the upcoming term. Check the premium, but also check that section where it tells you what’s changed. Look at your deductibles, as well, because they might have changed. When you have that renewal, call up the following companies for quotes: State Farm, Allstate, GEICO, Farmers, Liberty Mutual, USAA (if you’re able) and call an Independent Insurance Agent. By making those seven calls, you’re going to end up covering 97% of the insurance market in the state. Make sure that they’re matching your Dwelling Coverage, deductibles, and “options & endorsements” for an apples-to-apples comparison.
#2.5: Shop Now! You don’t actually have to wait until your policy renewal to come up before you shop your policy around. If your policy term renews six months from now, you can absolutely call around and get some quotes. The insurance contract is a “contract of adhesion* which means that you have the power to cancel that contract at any time, and they have to issue you a pro-rated refund for any money they still have in your account. So, don’t let the fact that your mortgage company already paid the insurance premium this year stop you from getting alternate quotes.
#3: Most Competitively Priced Carriers. From what I’ve personally observed, the most competitively priced carriers on average in the Central Texas right now are Farmers, SageSure, Travelers, Safeco, Homesite, Foremost (Star), Mercury, & USAA. Some of these carriers do require a 1.5% or a 2% Wind/Hail deductible, and some of them require you to bundle your auto insurance. So, if you’re adamant about having a 1% Wind/Hail deductible and might be okay paying a couple extra hundred dollars for it, look for Foremost, Homesite, State Farm, (I think) USAA, and Allstate. Everyone pays a different price, and you might be with one of these companies and think your premium is too high, well then refer to tip #2 (or #2.5). There’s gonna be one company out there that’s cheapest for you.
#4: Be Open To Bundling. Are you truly married to your car insurance company or would you consider bundle options if the numbers made sense? Maybe the best priced home insurance carrier requires you to bundle the auto insurance. If they can reduce your annual insurance costs, you should consider it as long as they’re providing you identical coverage to your current policy.
#5: Trim Those Tree Limbs. Some of these more competitively priced insurance carriers don’t want to insure a home if there are any thick tree limbs that overhang the roof. They want anything 3″ in diameter of thickness or more should be removed from crossing the roof line. Not just trimmed 5 or 6 feet above the roof – if it crosses the fascia, remove it. The carriers that don’t mind tree limbs over the roof, based on my experience are Safeco, Foremost, Allstate, State Farm, and Mercury (within reason). If you are one of these people that have tree limbs over your roof, and you are looking to switch your insurance, you need to ask how the new carrier’s underwriting guidelines addresses tree limbs over the roof. Ask the person to check with the underwriter to confirm it before buying the coverage. Also, the benefit of trimming those limbs is that you won’t have to file a claim and pay thousands out of pocket if we get another freeze or major storm and the limb snaps and drops on your house.
#6: Re-run Replacement Cost Estimates Your dwelling coverage does not equal the value of your home. Let me say that again, your dwelling coverage does not equal the value of your home. The dwelling coverage is how much it would cost to rebuild your home exactly the way it is right now, with no upgrades. The dwelling coverage is based on the cost of the “sticks and bricks” that make up your home. It doesn’t pay market value like car insurance does, because market value includes the land value, and you can’t rebuild dirt. If you’ve got an average neighborhood home, and there haven’t been any major updates to the interior in years, you might find that your Dwelling Coverage is too high if it’s over $200/SF (regardless of what a contractor might say, but I won’t get into that). Call your insurance service department and ask them to walk you through a new Replacement Cost Estimate to make sure that you aren’t over-insured. If the new estimate comes in lower, you can request the coverage to match it, and reduce your premium. If they can’t lower the coverage, you can refer to step #2 (or #2.5) and shop around.
#7: Adjust Coverage & Deductibles. If you bought your home a few years ago and you haven’t touched the insurance policy in a while, chances are you still have a 1% Wind/Hail deductible. Insurance carriers that don’t offer them anymore (Safeco, SageSure, Travelers, Mercury, etc.) are putting a much higher premium on those policies that still have a 1% Wind/Hail deductible. Depending on the carrier, you could save a lot of money by accepting a 2% deductible instead. You’ll have to do the math and figure out whether it makes sense based on how much you save versus how much you’d have to pay in the event of a hail claim, but if you need the extra money, you could save up to $1,000 on the adjustment. There are also some optional coverages that you may have on your policy currently, so it would be a good idea to call the service department and review those optional coverages to adjust or remove them.
I hope these tips are helpful and make an impact for you and your family, especially with Christmas coming up, I know everyone would love to be able to save a little money and do something better with it than pay insurance premiums.
submitted by /u/Geaux
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