SHOP AROUND
Friends, family, 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 claims 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. Contact the Insurance Commissioners office and request information on the insurer that has the fewest complaints per dollar written in the State.
RAISE YOUR DEDUCTIBLE
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay. The higher your deductible the lower the premium. Deductibles on homeowners policies typically start at $500. Increase your deductible to
- $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 personal liability coverage will take up to 25 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 roof, 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 up to 25 percent if your house is new. Homeowners insurance does not cover flood-related damage or earthquake damage which may be purchased separately. Your home needs to be within 1000 feet to a fire hydrant and under 2 miles to the fire station to get the best rates.
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 need. You should have the home insured for what the average home builder would charge to rebuild the home at the time of loss.
IMPROVE YOUR HOME SECURITY AND SAFETY.
You can usually get discounts of at least 5 percent for a smoke detector, fire extinguisher, burglar alarm, and 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/or a monitored 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.
SEEK OUT DISCOUNTS FOR GOOD CREDIT AND NO CLAIMS
Insurance companies calculate the home insurance rates using your credit score, no claims in the last few years, higher deductibles and condition/location of your home. The higher your credit score the lower your insurance premiums.
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. Remember to investigate the claims and customer service reputation of that company.
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. If you add square feet to the home make sure to inform your home insurance company.
LOOK FOR COMPANIES WITH THE FEWEST COMPLAINTS
All insurance companies are regulated through the state commissioners office. Contact the commissioners office to find the top producing companies with the fewest complaints. Then compare rates with the top few.