Homeowner’s Insurance
Twelve Ways to Lower Your Costs
1. Shop Around
It’ll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages, or contact your state insurance department. The National Association of Insurance Commissioners (www.naic.org) has information, including complaints, to help you choose an insurer in your state.
Also check consumer guides, insurance agents, companies, and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don’t consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim.
2. Raise Your Deductible
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 higher your deductible, the more money you can save on your premiums.
3. Don’t Confuse What You Paid for Your House with Rebuilding Costs
The land under your house isn’t at risk from theft, windstorm, fire, and the other perils covered in your homeowner’s policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.
4. Buy Your Home and Auto Policies from the Same Insurer
Some companies that sell homeowners, auto, and liability coverage will take five to fifteen percent off your premium if you buy two or more policies from them.
5. Make Your Home more Disaster Resistant
You may be able to save on your premiums by adding storm shutters, reinforcing your roof, or buying stronger roofing materials.
6. Improve Your Home Security
You can usually get discounts of at least five percent for a smoke detector, burglar alarm, dead-bolt locks or sprinkler system and a fire and burglar alarm that rings at the police, fire, or other monitoring stations.
7. Seek out other Discounts
Some employers and professional associations administer group insurance programs that may offer a better deal than you can get elsewhere.
8. Maintain a Good Credit Record
Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowner’s insurance policies.
9. Stay with the Same Insurer
If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder.
10. Review the Limits in Your Policy and the Value of Your Possessions at Least Once a Year
You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need.
11. Look for Private Insurance if You are in a Government Plan
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 ten years old.
Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you’ll have to pay for a flood insurance policy that costs an average of four hundred dollars a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov.
Most homeowner’s policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowner’s insurance cost, you also want to make certain you have all the coverage you need.
Abbreviated from booklet by: Insurance Information Institute
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