12 Ways to Save on Your Insurance

What You Should Know About: 

Managing the Cost of Your Homeowners Insurance

Here are a few tips that could help reduce the cost of your Homeowners insurance

What you should know:

• The hundreds of Homeowners insurance companies writing in the Northwest each have their own unique criteria for determining who they’ll insure (underwriting) and how much each policy will cost (rating). It pays to do your homework and shop around!
• You can work with a reputable insurance agent or broker or research companies and get quotes online or on the phone to make sure you’re getting the right policies – and the best deals.
• You can also save money with discounts, bundling your policies under a single insurer, increasing your deductible and being responsible with your finances and your home.

Do Your Discount Homework. The price you pay for your Homeowners insurance can vary by hundreds of dollars, depending on your personal circumstances and the insurance company you choose to buy your policy from. Companies use unique underwriting and rating guidelines and offer many types of discounts designed to compete for your business, so it’s important to ask your agent or company representative about their rating policies, underwriting guidelines and discounts available to you.

Don’t Be Shy!  Shop Around. Work with a reputable insurance agent or broker, call companies directly or access information online for price quotes. But don’t shop for prices alone. You’ll want an insurer that provides good customer service, especially when you need to file a claim. 

Check Up On the Insurance Company. Make sure the prospective insurance company you choose is if healthy financially. You can “check up on” insurance companies with the state agencies that regulate their business in your state. Click here to find your state Insurance Department for Washington, Oregon or Idaho.

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 could save up to 24 percent and a $2,500 deductible could save up to 30 percent, depending on your insurance company.

Keep in mind, however, that your insurance policy may have a separate deductible for damage from major disasters if you live in a disaster-prone area. 

Buy Your Home and Auto Policies from the Same Insurer. Many companies that sell homeowners, auto and umbrella coverage will give you a 5-15 percent discount on your premium if you by two or more policies. But make certain that any combined price from one insurer is lower than buying the coverages separately from different companies.

Make Insurance Part of Your Home-Buying Decision. Consider how much it will cost to insure a home you’re considering for purchase. 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 if your house is new. Also, find out if your neighborhood has a full-time or volunteer fire service. The closer your house is to firefighters and their equipment, the lower your premium is likely to be.

Insure Your House, Not the Land 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 should. 

Ask about Replacement Cost Coverage. Ask your insurance company or agent about “Replacement Cost Coverage” as an alternative to “Actual Cost Coverage.” Actual Cost Coverage may reduce your premium – but it may not keep up with the rising cost of rebuilding your home and/or replacing your possessions if your home is destroyed by fire or other disaster.

Beef Up Your Home Security. You can usually get discounts 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 suppression sprinkler system and a fire and burglar alarm that alerts the police or another monitoring facility. But these systems aren’t cheap and not every system qualifies for the discount, so make sure you find out what systems your insurer recommends and what sort of discounts it may offer.

Over 55? Inquire About Discounts for Seniors. Senior Citizens and retired people tend to stay at home more and spot fires sooner than people who are away from their homes most of the day at work. If you’re at least 55 years old and/or retired, you may qualify for a discount with some companies.

Consider Staying with the Same Insurer. If you’ve kept your coverage with the same company for several years, you may receive special consideration. Many 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 Annually 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 30-year-old fur coat is no longer worth the money you paid for it, you’ll want to reduce or cancel the floater for it and pocket the difference.

*Some information provided by Insurance Information Institute