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.