From the most expensive county to the least expensive, home insurance premiums vary by more than $1,000 per year. According to the National Association of Insurance Commissioners, the average annual U.S. premium was $822 in 2007; the most recent year for which figures are available.
Here are several smart moves you can make to lower the cost of your own homeowners’ policy:
Raise your deductible. According to the Insurance Information Institute, homeowners can decrease their premium by up to 25% by raising their standard deductible from $500 to $1,000. Because most homeowners usually won’t file a claim unless the expense is substantial, this is a smart, money saving move.
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Get a multi-policy deal. Bundling assets together, such as home, auto and motor bike, has been a catchphrase for saving and convenience. The Insurance Information Institute estimates that buying two or more policies from the same carrier can save you 5% to 15%. But before you commit, it pays to do some comparison shopping to be sure that combining your homeowners insurance purchase with your auto, life, or umbrella liability policy really does add up to a lower total than you would get if you bought them from different companies. Obtain at least three price quotes by calling several insurance companies directly, use online premium comparison sites or check out price information available through your state insurance department. To compare home insurance rates, visit www.AllState.com.
Make smart home improvements. Lower your premium with a new roof, or by updating your heating, electrical or plumbing system, or adding new safety features like an alarm system, fire extinguishers, and smoke detectors. Putting a fence around that backyard swimming pool — or getting rid of it altogether — can get you a lower-cost policy by lowering your claims risk in the eyes of your insurance company.
Talk to your agent. Have a conversation with your insurance agent about lowering your premiums without losing any of your current benefits. All you may have to do is ask, and chances are in your favor that he or she can find a way. Additionally, contact the agency any time you make modifications to your home, including installing sprinklers, burglar alarms, a backup sump pump, gutter improvements, or even putting in a new walkway. Your insurance agent will let you know how your policy will be affected.
Maintain a healthy credit score. To determine rates, many carriers use insurance scores; numerical rankings based largely on credit history. Although your insurance score also includes other factors, such as length of insurance, good credit goes a long way toward keeping your homeowners insurance affordable. Overall, individuals who have a higher credit rating receive a more favorable insurance score.
Review your policy regularly. Your annual renewal period is a good time to review your policy to make sure it contains accurate information about the size and construction of your home. Inform your agent about any significant changes affecting the home and its surroundings. Double check that you’re taking advantage of all available discounts and that none of those you currently have need to be renewed. For example, if you live in an incorporated town that offers municipal fire protection, you can save as much as 60% to 70% off your premium.
For more information on choosing the best home insurance for your needs, check out the Consumer Buying Guide.