Jan 30, 2013

Reducing your Homeowner's Insurance

Photo credit: cachesurfer from morguefile.com

Nowadays, more and more people are looking for ways to reduce their monthly expenses. Higher housing costs coupled with higher health insurance, food and fuel prices have many households financially strapped. While you can’t change present economic conditions, you can take steps to reduce some of your recurring monthly expenses. Some families eat out and entertain less, whereas others downscale their phone and cable plans. But these aren’t the only ways to save money on a monthly basis.
Do you own a home? If so, here are six practical ways to lower your homeowner’s insurance.
1. Increase your deductible. In the event of a fire, tornado or other damage, your insurance company pays a claim after you satisfy your insurance deductible. This is the amount that you pay out-of-pocket. Typically, homeowner’s insurance policies have a $500 deductible. However, you can raise your deductible and save on your insurance premium each month. This increases the amount you pay out-of-pocket, and to compensate for this higher amount, the insurance company charges less. If you increase your deductible to $1,000, you can save (on average) about 25% a month.
2. Bundle your insurance. If you currently have an auto insurance policy, purchase your homeowner’s insurance from the same company to save monthly. Insurance providers typically give discounts to customers who remain loyal to the company. With two or more policies from the same insurance provider, you can save as much as 5% to 15%.
3. Get a home security system. The more measures you take to protect your home, the more you’ll save. For example, home insurance companies offer extra discounts for smoke detectors and home security and alarm systems. Installing these safety features can reduce your insurance premium by as much as 20%. Extra security measures can protect your home from burglary and fire damage, thus reducing the odds of filing a claim with your insurance provider.
4. Improve your credit. A good credit history can also cut your homeowner’s insurance premium. Some insurance companies have started checking credit reports and credit scores. Although bad credit will not result in an insurance rejection, bad credit can result in a higher premium. To ensure the lowest insurance price, always pay your bills on time and pay down your consumer debt.
5. Check for retirement discounts. To help retirees keep expenses low, some insurance providers offer discounts to people ages 55 and over. Since these individuals do not work, they are generally home during the day and have more time to maintain their properties. This can result in fewer claims. To compensate for fewer claims, some insurance providers offer discounts up to 10%.
6. Shop around. If your insurance policy is up for renewal, contact two or three other providers and request no-obligation quotes. Compare these quotes with your current rate to see if you can save money.
The cost of homeowner’s insurance varies from provider-to-provider. If you’ve never reviewed your coverage, you might pay more than necessary. Contact your insurance company to see if you’re eligible for discounts.

  Content provided by Becky Wilcox


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