The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the size of your house and the insurance company you buy your policy from. Here are some ways to save money. Shop around. Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers. Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet. But don't shop price alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they make available consumer complaint ratios by company. You can also check out www.badfaithinsurance.org/indexdetaillist.html Select an agent or company representative that takes the time to answer your questions. Raise your deductible. A deductible is the amount of money you have to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible, the more money you save on your premium. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25%. If you live in a disaster-prone area, your insurance policy may have a separate deductible for damage from major disasters. 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. Buy your home and auto policies from the same insurer. Most companies that sell homeowners insurance also sell auto and umbrella liability insurance. (An umbrella liability policy will give you extra liability coverage.) Some insurance companies will reduce your premium by 5% to 15% if you buy two or more insurance policies from them. But make certain this combined price is lower than buying policies from different companies. 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'll pay a higher premium than you should. Ask about discounts for home security devices. You can usually get discounts of at least 5% for a smoke detector, burglar alarm or dead-bolt locks. Some companies may cut your premiums by as much as 15% or 20% 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 one, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums. Seek out other discounts. Many companies offer discounts, but they don't all offer the same discount or the same amount of discount in all states. Ask your agent or company representative about discounts available to you. If you've completely modernized your plumbing or electrical system recently, some companies may also provide a price break. Stay with the same insurer. If you've been insured with the same company for several years, you may receive a discount for being a long-term policyholder. Some insurers will reduce premiums by 5% if you stay with them for three-to-five years, and by 10% if you're a policyholder for six years or more. To ensure you're getting a good deal, periodically compare this price with the prices of policies from other insurers. |
