Ten Ways to Lower the Cost of Your Homeowner’s Insurance

While most states don’t legally require you to carry homeowner’s insurance, just about every mortgage lender is going to require proof of coverage for the term of your loan.  Regardless of whether you are required to or not, homeowners should carry insurance on their homes because it’s often the largest asset they own. Don’t be fooled into thinking it’s too expensive. You can find the right amount of coverage to suit your needs at affordable rates if you follow these guidelines:

  1. Shop around – Talk to a number of insurers, and ask about rates and services offered, especially when it comes to handling a claim.
  2. Raise your deductible – A deductible is the amount of money you are responsible for paying in the event of a loss. The higher your deductible, the more money you can save on your premiums. Keep in mind that if you live in an area susceptible to natural disasters, your insurance policy may have a separate deductible for certain types of damage.
  3. Don’t confuse what you paid for your house with rebuilding costs – The land your house sits on isn’t at risk from theft, windstorm, fire or any other peril covered in your homeowner’s policy; so don’t include its value in deciding how much coverage to buy.
  4. Buy your homeowner’s and auto insurance from the same insurer – Some insurance companies will take 5 to 15 percent off your premium if you buy two or more policies from them.
  5. Make your home more disaster resistant – You may be able to reduce your premiums by adding storm shutters, or reinforcing your roof. 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.
  6. Improve your home security – You can usually get discounts for installing a smoke detector, burglar alarm or dead-bolt locks. Some companies will cut your premium by 15 to 20 percent if you install a sprinkler system and a fire and burglar alarm that rings the police and fire station nearest you. Before you buy such a system, find out if your insurer offers a discount, and how much it will save on premiums.
  7. Ask about other discounts – If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent from your insurer because you are at home more. Being in the house a lot means you are less likely to be burglarized, and more likely to spot a fire before it gets out of control.
  8. Maintain a solid credit record – Insurers use credit information to price homeowner’s insurance. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
  9. Stay with the same insurer – If you keep your coverage with a company for several years, you could receive a special discount for being a long-term policyholder.
  10. Review your policy 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 no longer need.

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