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.