Easy ways to lower your home insurance costs

It's a must-have that can save you thousands of dollars when the unexpected strikes, but you may not pay much attention to your renter's or home owner's insurance. Real estate expert John Adams shows us ways you can save on your home insurance bill.

1. Shop Around

It'll take some time, but could save you a good sum of money. Ask your friends, check the Internet or contact your local chamber of commerce.

Also check with online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices.Talk with several agents and ask them what they would do to lower your costs.

2. Raise Your Deductible

Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. If you can handle the risk, take a look at a $2500 deductible. Your annual savings will be considerable.

3. Don't confuse the coverage you need with the FMV.

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 will pay a higher premium than you should.

4. 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. But make certain this combined price is lower than buying the different coverages from different companies.

5. Make your home more disaster resistant

Find out from your insurance agent or company representative what steps you can take 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, reinforcing your roof or buying stronger roofing materials. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

6. Improve your home security

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, fire or other monitoring stations.

7. Seek out other discounts

Companies offer several types of discounts, but they don't all offer the same discount or the same amount of discount in all states. For example, since retired people stay at home more than working people they are less likely to be burglarized and may spot fires sooner, too. Retired people also 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.

8. Maintain a good credit record

Having a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies.

9. Stay with the same insurer

If you've kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.

10. Review the limits in your policy and 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.

11. Look for private insurance if you are in a government pool

If you live in a high-risk area -- say, near the Georgia coast -- and have been buying your homeowners insurance through the Georgia Underwriters Association, you should check with local insurance agents 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.

12. When you're buying a home, consider the cost of homeowners insurance

You'll pay less for insurance if you buy a house in a community that has a highly rated fire department. It may also be cheaper if your home's electrical, heating and plumbing systems are less than 10 years old. 

These steps alone could cut your premiums by 5 to 15 percent.


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