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.
