Ways to Save
Insurance is a highly competitive business and the price you
pay for your Homeowners Insurance can vary by hundreds of dollars,
depending on your personal circumstances and the insurance company
you buy your policy from. Companies offer many types of
discounts, so it's important to ask your agent or company representative
about discounts available to you. Here are some important
ways to save money and make sure you have the right coverage when
you buy Homeowners Insurance.
Be Sure to Shop Around
It'll take a few phone calls, but they could save you
a good sum of money. Ask your friends, check the yellow
pages or call your state's insurance department. Also check
consumer guides, insurance agents, and companies. This will
give you an idea of price ranges and tell you which companies
or agents have the lowest prices. But don't consider price
The insurer you select should offer both a fair price and excellent
service. Quality service may cost a bit more, but it provides
added conveniences, so talk to a number of insurers to get a feeling
for the type of service they offer. Ask them what they would do
to lower your costs. Also check the financial ratings of
the companies. Then, when you've narrowed the field to three
insurers, get price quotes.
Raise Your Deductible
Deductibles are the amount of money you agree to pay toward an
insured loss before your insurance company pays the remaining
amount, up to the limits of your policy. Deductibles on Homeowners
policies typically start at $250. Increasing your deductible
to $500 could save you up to 12 percent; a deductible of $1,000,
up to 24 percent; $2,500, up to 30 percent and $5,000, up to 37
percent, depending on your insurance company.
Buy Your Home and Auto Policies
From the Same Insurer
Many companies that sell homeowners, auto and umbrella coverage
will give you a five- to 15-percent discount off of your premium
if you buy two or more policies.
When You Buy a Home...
Consider how much it will cost to insure it. Because a new
home's electrical, heating and plumbing systems and overall structure
are likely to be in better condition than those of an older house,
insurers may offer you a discount of 8 to 15 percent if your house
Find out if your town has a full-time or volunteer fire service?
Also determine if your house is close to a hydrant or fire station?
The closer your house is to firefighters and their equipment,
the lower your premium is likely to be.
Insure Your House, Not the
The land under your house isn't at risk from theft, windstorm,
fire and the other perils covered in your Homeowners policy, so
don't include its value when deciding how much Homeowners Insurance
to buy. If you do, you'll pay a higher premium than you
Beef up Your Home Security
You can usually get discounts of at least five percent for a smoke
detector, burglar alarm, or dead-bolt locks. Some companies
may offer to cut your premium by as much as 15 or 20 percent if
you install a sophisticated fire supression sprinkler system and
a fire and burglar alarm that alerts the police or another monitoring
facility. These systems aren't cheap and not every system
qualifies for the discount. Before you buy such a system,
find out what systems your insurer recommends and what sort of
discounts it may offer.
Smoking accounts for more than 23,000 residential fires a year.
That's why some insurers offer to reduce premiums if all
of the residents in a house don't smoke.
Seek Discounts for Seniors
Retired people stay at home more and spot fires sooner than working
people. Retired people have more time for maintaining their homes,
too. If you're at least 55 years old and retired, you may
qualify for a discount of up to 10 percent with some companies.
See If You Can Get Group Coverage
Employers, alumni and business associations often work out an
insurance package with an insurance company at very competitive
rates. Ask your company's personnel manager or your association's
director if such a package is available to you.
Consider staying with one
If you've kept your coverage with a company for several years,
you may receive special consideration. A number of insurers
will reduce your premiums by five 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.
Compare 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. If your five-year-old fur coat is no longer
worth the $20,000 you paid for it, you'll want to reduce your
floater and pocket the difference.
Look For Private Insurance
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.
Learn Nine Ways to Save on Your Auto Insurance