How To Lower Your
Homeowner Insurance Costs

What you pay for your homeowner insurance can vary by hundreds of dollars, depending on the amount of insurance and which insurance company you buy your policy from.

Consider the following suggestions when buying homeowner insurance.

Shop Around For Home Insurance

It takes a little time, but could save you a good chunk of money.

Ask your friends for referrals.

In the US, states often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.

This will give you an idea of price ranges and tell you which companies have the lowest prices. Don't consider price alone as your guide to homeowner insurance. The insurer you choose should offer a fair price and deliver the quality of service you'd expect if you need help in filing a claim.

Talk to a number of insurers to get a feeling for the type of service they provide. Ask them for recommendations or suggestions to lower your costs.

Check the financial stability of the companies you are considering with rating companies such as Standard & Poor’s and consult consumer magazines. Once you've narrowed the field to three insurers, get price quotes. (You Can Shop and Compare multiple Homeowners Insurance quotes for free. here.) (Canadians here )

Increase Your Deductible

A deductible is the money you have to pay toward a loss before the insurance company starts to pay a claim, according to the terms of your policy. The higher the deductible, the more money you can save on your premiums. Most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000 or more, you could save as much as 25 percent.

If you live in a disaster - prone area, your homeowner insurance policy may have a separate deductible for particular kinds of damage.

• If you live near the coast in the East, you may have a separate windstorm deductible.
• If you live in an area vulnerable to hail storms, you may have a separate deductible for hail.
• If you live in an earthquake-prone area, your earthquake policy has a separate deductible.

Don't Overinsure

Don’t confuse what you paid for your home with rebuilding costs. The land under your house isn't at risk from the perils covered in your homeowners policy. Don't include the land value in deciding how much homeowner insurance to buy. If you do, you will be paying a higher premium than you should.

Consider Buying Your Home And Auto Insurance Policies From The Same Insurer

If you buy two or more policies from them, some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium. Make sure this combined price is lower than buying the two coverages from different insurance companies.

Make Your Home More Disaster Resistant

Ask your insurance agent or company representative what you can do to make your home less susceptible to windstorms and other natural disasters.

You may be able to reduce your premiums by adding storm shutters or reinforcing your roof.

Older homes can be retrofitted to better withstand earthquakes. Also, consider updating your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

Improve Home Security

Smoke detectors, burglar alarms or dead-bolt locks can usually get you at least a 5 percent discount on your premiums.

If you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations you may be able to get a 15 to 20 percent reduction in your premiums. Be sure to ask the insurer what system they recommend as not all qualify. As well, ask how much you would save on the premiums as these systems are not cheap.