Twelve Ways to Lower Your Homeowners Insurance Costs
The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Here are some things to consider when buying homeowners insurance.
Shop around
It'll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department. (Phone numbers and Web sites are on the back page of this brochure.) National Association of Insurance Commissioners (www.naic.org) has information to help you choose an insurer in your state, including complaints. 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.
Check the financial stability of the companies you are considering with rating companies such as A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com/ratings) and consult consumer magazines.
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.
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.
Buy your home and auto policies from the same insurer
Some companies that sell homeowners, auto and liability coverage will take 5 to 25 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.
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.
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. If you're at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies.
Maintain a good credit record
Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies.
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.
Look for private insurance if you are in a government plan
When you’re buying a home, consider the cost of home 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 fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old.
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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 at www.fema.gov/nfip/. 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. https://www.srsbrokers.com 770-321-1223
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