At a time of rising prices and economic uncertainty, consumers are looking for innovative ways to hold on to their cash. A good place to start is by reviewing you home insurance policies:
The price you pay for your home insurance can vary by hundreds of dollars, depending on many factors. Here are some ways to help you save money:
- When choosing a home, consider the cost of homeowners insurance
The price you pay for homeowners insurance depends in part on the cost of rebuilding your home and the likelihood that it will be damaged by natural disasters or that it will burn down. You may pay less if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. You may also pay less if the electrical, heating and plumbing systems in the house are less than 10 years old. If you live in the East, consider a brick home because it is more wind-resistant. If you live in an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5 to 15 percent.
- Ask for higher deductibles
Deductibles represent the amount of money you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. On your homeowners insurance, consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25 percent.
- Do not confuse what you paid for your house with rebuilding costs
The land under your house is not at risk from theft, windstorm, fire and the other perils covered by your homeowners policy, so its value should not be a factor in deciding how much homeowners insurance to buy. If you do include the value of the land, you will end up paying a higher premium than you should. “Also, keep in mind that the real estate value of your home has nothing to do with the amount it would cost to rebuild your home,” said Loretta Worters, vice president with the I.I.I. “Even with the decline in the housing market, homeowners need to make sure they have enough coverage.”
- Review policy limits and the value of your possessions annually
While your policy should cover any major purchases or additions to your home, you do not want to spend money for unnecessary coverage. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you should reduce or cancel your insurance floater (extra insurance for items whose full value is not covered by standard homeowners policies) and pocket the difference. If you have sold jewelry, antiques or art, do you still have insurance on those items? If so, notify your insurance company to cancel the coverage.
- Ask about discounts for home security devices
You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies may cut your premiums 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, fire or other monitoring stations. However, these systems can be expensive and not every system qualifies for a discount. Before you invest in an alarm system, find out what kind your insurer recommends, how much the system would cost and how much you would save on premiums.
- Make your home more disaster-resistant
Take the time to research what you can do to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters and shatter-proof glass, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes and windstorms. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage. Taking these steps may make your house more insurable, and some companies may even offer mitigation discounts, but, most importantly, your home and your family will be safer as a result.”
- Seek out other discounts
Many companies offer discounts on homeowners insurance, but they do not all offer the same types of discounts, nor are the discount levels the same in all states. Ask your agent or company representative about specific discounts available to you. For example, if you are at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. If you have completely modernized your plumbing or electrical system recently, some companies may also provide a price break.
- Stay with the same insurer
If you have been insured with the same company for several years, you may receive a discount for being a long-term policyholder. Some insurers will reduce premiums by 5 percent if you stay with them for three to five years and by 10 percent if you have been a policyholder for six years or more. To ensure you are getting a good deal, shop around periodically at www.RateElert.com to compare your premiums to those offered by other insurers.
- Ask about group coverage
Does your employer administer a group insurance program? Check to see they offer a homeowners policy that is a better deal than you can find elsewhere. In addition, professional, alumni and business groups may offer an insurance package at a reduced price.
Prices can vary significantly from company to company, so when your home policy comes up for renewal, it pays to shop around. Get at least three price quotes from top-rated insurance companies from one place at www.RateElert.com
Many experts agree you should compare rates every year to make sure you are still getting the best deal and as your life changes, your insurance may need to change too. With RateElert's free insurance NetShopper ® renewal reminder service you can feel secure knowing you are always getting the best rates possible, compare rates today at www.RateElert.com , Insurance Shopping made Easy®!