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10 Ways To Save On Homeonwers Insurance
by: Robert Rogers
1. Raise Your Deductible - Save Up To 25%
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. Nowadays,
most insurance companies recommend a deductible of at least $500. If you can
afford to raise your deductible to $1,000, you may save as much as 25 percent.
Remember, if you live in a disaster-prone area, your insurance policy may have
a separate deductible for certain kinds of damage. If you live near the coast
in the East, you may have a separate windstorm deductible; if you live in a state
vulnerable to hail storms, you may have a separate deductible for hail; and if
you live in an earthquake-prone area, your earthquake policy has a deductible.
2. 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 homeowners 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.
3. Buy your home and auto policies from the same insurer
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.
4. 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.
5. Improve your home security
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.
6. Seek out other discounts
Companies offer several types of discounts, but they don't all offer the same
discount or the same amount of discount in all states. For example, since retired
people stay at home more than working people they are less likely to be burglarized
and may spot fires sooner, too. Retired people also have more time for maintaining
their homes. If you're at least 55 years old and retired, you may qualify for
a discount of up to 10 percent at some companies. Some employers and professional
associations administer group insurance programs that may offer a better deal
than you can get elsewhere.
7. 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.
In most states, your insurer must advise you of any adverse action, such as a
higher rate, at which time you should verify the accuracy of the information
on which the insurer relied. To protect your credit standing, pay your bills
on time, don't obtain more credit than you need and keep your credit balances
as low as possible. Check your credit record on a regular basis and have any
errors corrected promptly so that your record remains accurate.
8. 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. 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.
9. 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. If your five-year-old
fur coat is no longer worth the $5,000 you paid for it, 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.
10. 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 or contact your state department of insurance for the names of
companies that might be interested in your business. 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.
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This article was posted on October 28, 2005 |
