You
can save money on homeowner's insurance a number of ways. Discounts
from your insurance company are available for a wide variety of
reasons, ranging from the type of building material used to build your
home to how close you live to a fire station. These discounts will
vary by state and insurance company.
Here
are 12 ways you can save money on your homeowner's policy:
1)
Shop around.
Check with many different insurance
companies to get rate quotes. Do your friends or family members like
their insurance company?
2)
Raise your deductible.
The deductible is the amount of money you
have to pay toward a loss before your insurance kicks in. Typically,
deductibles start at $250.
Increase your deductible to:
$500 and save up to 12% on your premiums
$1,000 and save up to 24%
$2,500 and save up to 30%
$5,000 and save up to 37%.
Just make
sure you can afford to pay the higher deductible out of pocket if
something should happen.
3)
Buy your home and auto policies from the same company.
Many companies will give a multiline
discount if you buy both homeowner's and auto coverage from them.
4)
Consider insurance when buying a home.
If you're looking at buying a home, think
about the cost of insuring the home. A newer home's electrical,
heating and plumbing systems and overall structure are likely to be in
better condition than those of an older home. This can lead to a
discount on your premiums.
You'll also want to consider the
construction of the home and where you live. If you live on the East
Coast, you'll want the house to be able to stand up to wind damage,
while on the West Coast, you need to keep earthquakes in mind.
5)
Insure your home, not the land.
While your home and its contents are at risk
from fire, theft, windstorms and other perils, the land your home sits
on is not. Don't include the value of the land in deciding how much
homeowner's insurance you need to buy.
6)
Improve security and safety.
Items such as deadbolt locks, burglar alarms
and smoke detectors usually can bring discounts of 5% each, depending
on the company. Your insurance company may also offer a significant
discount of 15% or 20% if you install a sophisticated home-security
system. If you're thinking about buying such a system, check with your
insurer to see which systems they recommend and which will earn you a
discount.
7)
Stop smoking.
Smoking accidents account for more than
23,000 residential fires every year. Some insurers offer to reduce
premiums if no one in the home smokes.
8)
Senior discounts.
Insurance companies have found that retired
people stay at home more and spot fires sooner than working people.
Older people also have more time for maintaining their homes. If
you're at least 55 years old and retired, you might qualify for a
discount of as much as 10%.
9)
Group coverage.
Alumni and business associations often work
out insurance deals with an insurance company, which includes a
discount for association members. Ask your association's director
about any such deals.
10)
Stay with an insurer.
If you've kept your coverage with a company
for several years, you may receive special consideration. Several
insurers will reduce their premiums by 5% after staying with them for
three to five years; and some companies will discount you as much as
10% after six years.
11)
Check your policy annually.
You want your policy to reflect the value of
your home and belongings. If you review your policy every year, you
will be able to make the necessary adjustments. If, for example, you
just sold a valuable painting, you won't need the same amount of
coverage. But if you added a garage, you'll need to increase your
coverage.
12) Look for private insurance
first.
If
you live in a high-risk area (one that is especially vulnerable to
coastal storms, fires or crime) and think you'll be forced to buy
homeowner's coverage from your state's high-risk insurance pool, check
first with an insurance agent. You may find that you can still buy
insurance at a lower price in the private insurance market than from
the insurer of last resort.
