Steps to Save Money on Home Insurance

1. Shop and Consult – Consulting with family, friends, the Internet and even the phone directory are great ways to find home insurers. Getting a wide range of prices from various companies is always a good start but it’s also not wise to settle for the price alone. Fair price and excellent service may be hard to find but it’s always wide to settle with one that has a good reputation. It may cost a bit more to have quality service but it is a very important factor in case a claim has to be made.

Talking to a number of insurers and getting a feel of what they offer, asking them about how to lower prices. Checking the company’s financial ratings with AM Best or Standard and Poor’s is also advisable.

2. Raising Deductibles – Paying toward a loss before the insurance company starts to pay is called deductibles. Typically, homeowner policies deductibles start at $250 and increasing it will make way for savings.

$ 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

3. Buying Home and Auto Policies from the Same Insurer – Homeowners buying auto and liability coverage are usually granted 5 to 15 percent off the premium if they buy two or more policies from the company.

4. Considering the Cost of Insurance Before Buying A House – Insurers may offer 8 to 15 percent discount for newly constructed homes. This is because a new homes’ electrical, plumbing, and heating systems are most likely to be in a better shape than those in older ones.

For those building a house, checking the construction details would be best. Those in the East for example should use brick since they are more resistant to wind damage. Those in the West meanwhile are better off with frames since said materials are resistant to earthquakes. It also advised to avoid flood-prone areas, this allows about $400 annual savings to homeowners that need to purchase flood insurance. Homes that are close to firefighters and their equipment can also lower the premium.

It is wise therefore to choose the right location when building a house since it can cut the premium from 5 to 15 percent.

5. Insure Your House, Not the Land – In buying a home insurance, the value of the land should not be included since it is not really at risk from windstorm, theft, fire and other perils covered in a policy. Including the land’s value would mean a higher premium.

6. Home Security and Safety – Smoke detectors, dead-bolt locks, and burglar alarm an give homeowners discounts of up to 5 percent. Installing a sophisticated sprinkler system can also lead companies to offer 15 to 20 percent discount on the premium. The same goes with a fire and burglar alarm system that rings at the police station or other monitoring facilities. Said systems can be expensive and not all are qualified for the discount so before purchasing and installing any of its kind, it is best to consult with the insurer.

7. Quit Smoking – Since smoking accounts for more than 23,000 residential fires a year, some insurers offer to reduce premiums if the entire household does not smoke.

8. Exploring Discounts for Seniors or Retirees – Some companies offer 10 percent discount to people at least 55 years old and retired. This is because retirees usually stay at home and have more time to maintain their homes. They are also able to spot fires sooner than working people.

9. Discounts from a Group Coverage – Some insurers offer group coverage packages for alumni and business associations. Members usually get discounts on homeowner’s insurance.

10. Loyalty with the Insurer – Staying with the same insurer can be an advantage. Five percent reductions from premiums are usually given to policy holders that have stayed with the company for 3 to 5 years, and 10 percent for 6 years or more.

11. Comparing the Policy Limits against Value of Possessions – Making sure that a policy covers for things or properties that you need is important. Some people make a mistake of paying for something that they don’t really need.

12. Checking Private Insurance First – There are government plans for homes located in high-risk areas or those vulnerable to coastal storms, crime, or fires. Consulting with an insurance agent however is still suggested since the private market would allow homeowners to buy insurance at a lower price.

About the Author

Shannon Kietzman is the author. She helps others determine how much is home insurance a month and how to best meet their home insurance needs through content creation.