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Top Ways to Save on Homeowners Insurance

You can save money on homeowners insurance if you know how.  Discounts from your insurance company are available for a variety of reasons, ranging from the type of building material used to build your home to how close you live to a fire station.  Here are several ways you can save money on your homeowners policy:
Raise your deductible. The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Typically, deductibles start at $250. Increase your deductible to:
  • $500 and save up to 12% on your premiums.
  • $1,000 and save up to 24%.
  • $2,500 and save up to 30%.
  • $5,000 and save up to 37%.
Just make sure you can afford to pay the higher deductible if something should happen.
Buy your home and auto policies from the same company. Many companies will give a discount if you buy both homeowners and auto coverage from them.
Consider insurance consequences when buying a home. If you’re looking at buying a home, think about the cost of insuring the home. A newer home’s electrical, heating and plumbing systems, and overall structure are likely to be in better condition than those of an older home. This can lead to a discount on your premiums.
Insure your home, not the land. Although your home and its contents are at risk from fire, theft, windstorms and other perils, the land your house sits on is not. Don’t include the value of the land in deciding how much homeowners insurance you need to buy.
Improve security and safety. Items such as deadbolt locks, burglar alarms and smoke detectors often bring discounts of 5% each, depending on the company. Your insurance company may also offer a significant discount of 15% or 20% if you install a sophisticated home-security system. If you’re thinking about buying such a system, check with your insurer to see which systems they recommend and which will earn you a discount.
Stop smoking. Smoking accidents account for more than 23,000 residential fires every year. Some insurers offer to reduce premiums if no one in the home smokes.
Try senior discounts. Insurance companies have found that retired people stay at home more and spot fires sooner than working people. Older people also have more time for maintaining their homes. If you’re at least 55 years old and retired, you might qualify for a discount of as much as 10%.
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% after you’ve been with them for three to five years, and some companies will discount you as much as 10% after six years.
Check your policy annually. You want your policy to reflect the value of your home and belongings. If you review your policy every year, you will be able to make the necessary adjustments. If, for example, you just sold a valuable painting, you won’t need the same amount of coverage. But if you added a garage, you’ll need to increase your coverage.
Look for private insurance first. If you live in a high-risk area (one that is especially vulnerable to coastal storms, fires or crime) and think you’ll be forced to buy homeowners coverage from your state’s high-risk insurance pool, check first with an insurance agent. You may find that you can still buy insurance at a lower price in the private insurance market than from the insurer of last resort.
Make payments electronically. Many companies now charge up to $5 for mailed payments, so have your payments automatically deducted to shave that cost. Sometimes the deductions can come from your credit card, so you don’t have to worry if the money is in your bank account when payment time comes.
Get replacement-cost coverage. Actual-cash-value coverage reimburses you for the cost of your property at the time of the claim, minus the deductible. This can result in a lower claim payout than you expect. If your TV is worth $50, for example, that’s all you’d get to buy a new one. Replacement-cost coverage will reimburse the full value of an item based on the cost of purchasing a new one. The upfront cost is greater, but you are more likely to receive accurate compensation for your possessions.