SHOP AROUND
Friends, family, the phone book and 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.
RAISE YOUR DEDUCTIBLE
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
