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| 12 WAYS TO LOWER YOUR HOMEOWNER INSURANCE COSTS |
1.Shop around for home insurance. Always get more than one quote. While you may not want to purchase just based on price, you will have a better idea of what home insurance coverage you can get at what price.
2.Increase your home insurance deductible. This strategy works with any kind of insurance. Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The more you are willing to pay the more you reduce the risk to the home insurance company. The higher your deductible, the more money you can save on your premiums. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage.
3.Don't confuse the cost of your home with rebuilding costs. Rebuilding costs are cost of materials and labor - and that's about it. You should never be including the cost of your land in the cost of the structure. If you do, you will pay a higher premium because you are insuring for a higher amount - but you won't be able to prove that you need that higher amount when it comes time for a claim.
4.Buy your home and auto policies from the same company. If you buy your car insurance and your home insurance through a single company they will usually give you a 'multiple policy' discount. It's worth it. Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.
5.Make your home more disaster resistant. Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.
6.Improve your home security. Ask for discounts for security systems. You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren't cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums.
7.Seek out other discounts. It's common for home insurance companies to offer discounts, but not to advertise those discounts. The home insurance companies also may not offer the same discounts in all states. Ask! If you have modernized an older home this may also qualify you for a discount. Senior citizens are eligible for discounts of 10% or more.
8.Maintain a good credit record. Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies.
9.Stay with the same home insurer. You may get credit for being a long-term policyholder. Ask about a discount for being continuously insured with the same company. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.
10.Review your policy annually and adjust your home insurance accordingly. You may want your policy to cover any major purchases or additions to your home. Or you might have items insured for more than they are worth! For instance, you have a favorite fur coat and it's no longer worth what it was five years ago. You'll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference.
11.Look for private insurance if you are in a government plan. If you live in a high-risk area – say, one that is especially vulnerable to coastal storms, fires, or crime –and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative.You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.
12.When you’re buying a home, consider the cost of homeowners insurance. You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. If you live in the East, consider a brick home because it's more wind resistant. If you live in an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5 to 15 percent.
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