Saving Money on Homeowner's Insurance

10 things you can do today

Saving money on your homeowner's insurance can be done by taking some simple steps. The following list has been compiled with the goal of reducing premiums by taking simple steps. Accordingly, some of these methods yield much higher results than others.

Lower Your Deductible

One of the simplest things you can do is to request a lower deductible on your policy. A deductible is an amount that you have to pay toward a claim before your insurance company pays. In the event of a claim, the insurance company simply subtracts your deductible from the repair cost. Typical deductible amounts on a homeowner's insurance policy can be as low as $100 or as high as $2,500. If you choose a higher deductible, you agree to share more in a possible loss and insurance companies give credit for this with a lower premium.

Change Your Coverage

There are different types of coverage available for a homeowner policy, some offering more comprehensive coverage. If your policy contains many coverage enhancements, you may consider scaling back some of the extra coverage that you have on the policy. There are two basic types of policies available. The first type contains a list of covered causes of loss, or "perils". Damage has to be caused by one of the items on the list to be covered. The second type of policy covers any type of loss unless it is excluded. This is far broader coverage. Be very careful when considering a reduction in coverage however as it may mean that you will have to pay for many types of losses on your own.

Shop Around

This time-tested but effective technique should always be utilized when shopping for insurance. Be careful that you are comparing similar coverage when looking at the cost however.

Eliminate Unneeded Coverage

As mentioned previously, coverage can vary greatly from one policy to another. One reason for this is sometimes the number of extra features a policy may have. There are riders and enhancements for items such as jewelry, money, silverware, sewer backup, and guaranteed replacement cost. While you may need such enhancements, you should review your policy to make sure you do and eliminate the ones you do not need.

Non-Smoking Credit

If you are a non-smoker, make sure you notify your insurance agent. Several insurance companies offer a discount on your premium if you do not smoke because this lowers the risk of a smoking related fire in the home.

Take Advantage of a Multi-line Discount

Combining your coverage into one insurance carrier can realize a substantial savings in your insurance premiums. This means that if you insure your cars and your home with the same company, that company will likely provide a discount for keeping all of your business with them.

Yearly Vs. Monthly Payments

An often-overlooked cost saving measure is to move to an annual payment plan instead of a monthly or quarterly plan. Insurance companies prefer to get their money sooner rather than later. Insurance companies frequently offer plans with periodic payments throughout the year; there are typically extra charges for this option.

Credit Score

Insurance companies do look at credit scores of potential customers. The reason for this is that studies show that people with lower credit scores are statistically more likely to make an insurance claim. Accordingly, they charge higher premiums to those people. Taking steps to improve your credit score will help to reduce your insurance premiums.

If you utilize the above methods, you will find that your insurance premiums will be reduced. Ask your agent or broker about these changes today and take advantage of smart decisions regarding your insurance coverage. Remember that insurance is a very competitive business and insurers are often willing to work to keep your business.

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