Six Ways to Lower Your Homeowner’s Insurance Premiums

In this tight economy, consumers are looking for every cost-cutting measure they can find, including trimming down the cost of their homeowner’s insurance. Consider the following ways to trim expenses while maintaining effective insurance coverage:

1. Go for a higher deductible. – A typical deductible on a home insurance policy starts at $250. The more you are willing to raise that level, the more you will save on premiums. The balancing act is to raise the deductible only to what you can afford in the event of an incident. Going as high as $5,000 can knock your premium down more than 35%, but if you don’t have 5K to spare, the lower rate really isn’t doing you any good.

2. Combine home and auto policies. – Most insurance companies will give policy holders a break if they are issuing both auto and homeowner’s coverage to the customer.

3. Don’t insure dirt. – When calculating the value of your home, don’t include the value of the land. It’s not going to burn down, be stolen, or suffer wind damage. You want insurance on the house and its contents only.

4. The safer you are, the less you pay. – Most policy holders do not realize they can lop off as much as 5% each for deadbolts, smoke detectors, and burglar alarms. Get a really sophisticated home security system and you could save as much as 20 percent. (Most insurance companies will recommend a particular security company, so check with your agent first to earn the maximum discount.)

5. Don’t just let your policy sit there. – Review your coverage annually. If you insured an antique, which you then sold, it need to come off your policy. If you added on to the house, the addition needs to be covered. These kinds of adjustments are necessary on a regular basis to keep your coverage comprehensive and cost effective.

6. Don’t mail in your payments. – That’s right. The days of the post office are numbered. Most insurance companies charge a fee for mailed payments, often $5 or more. Pay electronically to avoid such fees and to make sure the payment is always on time. (Late payments can result in higher premiums down the line.)

No one ever lowered their homeowner’s insurance policy without talking to their insurance agent. The most important cost-cutting strategy at anyone’s disposal is negotiation. If you’ve put in a new air conditioner or insulated the attic, you might be surprised how those changes will alter your insurance premiums. So pick up the phone and start asking questions. It’s the only way to get answers and to start saving your insurance dollars.