| 1. | Shop Around |
| Friends, family, the phone book and the Internet
are some of the sources you can use to find homeowners insurers.
Get a wide range of prices from several companies. But don't consider
price alone. The insurer you select should offer both a fair price
and excellent service. Quality service may cost a bit more, but
you buy insurance in case you need to make a claim, so it's important
to get a company with a good reputation. Talk to a number of insurers
to get a feeling for the type of service they give. Ask them what
they would do to lower your costs. Check the financial ratings of
the companies with AM Best or Standard and Poor's. |
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| 2. | Raise Your Interest |
| Deductibles are the amount of money you have
to pay toward a loss before your insurance company starts to pay.
Deductibles on homeowners policies typically start at $250. Increase
your deductible to $ 500 -- save up to 12 percent $1,000 -- save up to 24 percent $2,500 -- save up to 30 percent $5,000 -- save up to 37 percent |
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| 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. |
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| 4. | When You Buy a Home Consider How Much Insuring It Will Cost |
| A new home's electrical, heating and plumbing
systems and overall structure are likely to be in better shape than
those of an older house. Insurers may offer you a discount of 8
to 15 percent if your house is new. Check the home's construction:
In the East brick is better, because of its resistance to wind damage,
and in the West frame is better, because of its resistance to earthquake
damage. Choosing wisely could cut your premium by 5 to 15 percent.
Avoiding areas that are prone to floods can save you about $400
a year for flood insurance. Homeowners insurance does not cover
flood-related damage. The closer your house is to firefighters and
their equipment, the lower your premium will be. |
|
| 5. | 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 in deciding how much homeowners
insurance to buy. If you do, you'll pay a higher premium than you
should. |
|
| 6. | Improve Your Home Security and Safety |
| 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 station or other monitoring facility.
These systems aren't cheap and not every system qualifies for the
discount. Before you buy such a system, find out what kind your
insurer recommends and how much the device would cost and how much
you'd save on premiums. |
|
| 7. | Stop Smoking |
| Smoking accounts for more than 23,000 residential
fires a year. That's why some insurers offer to reduce premiums
if all the residents in a house don't smoke. |
|
| 8. | Seek Out Discounts for Seniors |
| Retired people stay at home more and spot fires
sooner than working people and 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. |
|
| 9. | See If You Can Get Group Coverage |
| Alumni and business associations often work out
an insurance package with an insurance company, which includes a
discount for association members. Ask your association's director
if an insurer is offering a discount on homeowners insurance to
you and your fellow graduates or colleagues. |
|
| 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 percent if you stay with them for
3 to 5 years; by 10 percent if you remain a policyholder for 6 years
or more. |
|
| 11. | Compare the Limits in Your Policy to 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. |
|
| 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 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. |
