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. LOOK FOR PRIVATE INSURANCE FIRST
If
you live in a high-risk area, one that is especially vulnerable to
coastal storms, fires, or crime, and have been buying your homeowners
insurance through a government plan, you should check with an insurance
agent or company representative. You may find that there are steps you
can take that would allow you to buy insurance at a lower price in the
private market.
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