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from the Insurance Information Institute
The price you pay for your homeowners insurance can vary
by hundreds of dollars depending on a number of factors, including
the company you buy your policy from.
Here are 12 STEPS you can take to help you SAVE MONEY on
your HOMEOWNERS INSURANCE:
1. SHOP AROUND
It'll take some time, but could save you a good sum of money.
Ask your friends, check the Yellow Pages or call your state
insurance department. You can also access insurance
information for your state on the Internet. States often
make information available on typical rates charged by major
insurers and many states provide the frequency of consumer
complaints by company.
Also check consumer guides, insurance agents, companies and
online insurance quote services. This will give you an idea
of price ranges and tell you which companies have the lowest
prices. But don't consider price alone. The insurer you select
should offer a fair price and deliver the quality service
you would expect if you needed assistance in filing a claim.
So 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.
2. RAISE YOUR DEDUCTIBLE
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.
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. 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.
6. 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.
7. 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. That's why you should ask your agent or company
representative about any discounts available to you. For example,
since retired people stay at home more than working people,
they are less likely to be burglarized and may spot fires
sooner. 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.
8. SEE IF YOU CAN GET GROUP COVERAGE
If your employer administers a group insurance program, check
to see if a homeowners policy is available and is a better
deal than you can find elsewhere. In addition, professional,
alumni and business groups 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.
9. 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.
10. 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) and
pocket the difference.
11. 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.
12. WHEN YOU'RE BUYING A HOME, CONSIDER
THE COST OF HOMEOWNERS INSURANCE
You may pay less for insurance if you buy a house close to
a fire hydrant or in a community that has a professional rather
than a volunteer fire department. It may also be cheaper if
your home’s electrical, heating and plumbing systems
are less than 10 years old. If you live in the East, consider
a brick home because it's more wind resistant. If you live
in an earthquake-prone area, look for a wooden frame house
because it is more likely to withstand this type of disaster.
Choosing wisely could cut your premiums by 5 to 15 percent.
Remember that flood insurance and earthquake damage are not
covered by a standard homeowners policy. If you buy a house
in a flood-prone area, you'll have to pay for a flood insurance
policy that costs an average of $400 a year. The Federal
Emergency Management Agency provides useful information
on flood insurance on its Web site. A separate earthquake
policy is available from most insurance companies. The cost
of the coverage will depend on the likelihood of earthquakes
in your area.
If you have questions about insurance for any of your possessions,
be sure to ask your agent or company representative when you're
shopping around for a policy. For example, if you run a business
out of your home, be sure to discuss coverage for that business.
Most homeowners policies cover business equipment in the home,
but only up to $2,500 and they offer no business liability
insurance. Although you want to lower your homeowners insurance
cost, you also want to make certain you have all the coverage
you need.
Questions? Contact financing@techvalleyhomes.com
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