How to Get Cheap Homeowners Insurance

Having your home insured can be costly specially when insurance companies based your homeowners insurance price on the area or square footage of your home, the estimated value in rebuilding it, the potential dangers of natural disasters, and your home’s neighborhood crime rate. Even cheap homeowners insurance has been increasing two or three times than what it was a couple of years ago and there are surely ways on how you can cut down on your coverage cost. One fact still remains after all these years: Home insurance price is soaring, making it an expensive option for many Americans today.

Although having a homeowners insurance is not a major requirement in most states, it is still best to have a peace of mind knowing that your personal property and home are protected from liabilities, calamities, and injuries that may cause damage to you and other people as well. Homeowners insurance price can come as a replacement cost or the amount it will take to have your home rebuilt or repaired for materials of like kind, without regard for the materials’ depreciation value. Your homeowners insurance price can also come at an actual cash value, which is the amount, minus the material’s depreciation value, that is needed in repairing or rebuilding your home. Whichever option shall depend on your choice of insurance coverage.

Ten Ways to Save on Cheap Homeowners Insurance:

1. Compare Premiums

You need to shop around and choose the best deal which can save you great sums of money. You can ask for referrals from friends or call your local state insurance department. The National Association of Insurance Commissioners ( www.naic.org ) has plenty of info and helpful resources to get you started. You may ask for any discount available if you have been employed in your company for three years and more. Don’t forget to check the company’s customer service and financial ratings. You may check with AM Best or Standard & Poor’s for data on the company’s financial strength.

2. Improve Your Credit Score

Having a clean, solid credit history can help you save on your homeowners insurance price policy. Know that your credit information is crucial in the rates that will be quoted to you by the insurance company of your choice. For you to have a good credit score, you can lessen the number of your credits, maintain a low credit balance, and make your credit payments on time.

3. Increase Your Deductible

Your homeowners insurance deductible is the sum of money you will have to pay before your insurance company pays you your claim. This means that the higher the deductible you have, the more money you can save on your homeowners insurance premium. A healthy deductible rate is at $500 and if you have the extra money, it is recommended that you raise it up to $1,000. Take note that if you live in disaster-prone areas, you might want to consider a separate deductible for that. Your homeowners insurance is like sharing a risk. How much can you afford to share?

4. Merge Your Policies

There are some insurance companies who offer both auto and home insurance coverage under one premium. This will save you 5 – 15 % off from the regular homeowners insurance rate. Instead of buying from two separate companies, you have the convenience of going for one without the need to pay more. Make sure that you are paying less than what it will be when you purchase these policies separately.

5. Don’t Purchase Unnecessary Coverage

There is just no sense purchasing additional coverage that you won’t need. For example, you may want to skip signing for an earthquake protection when you’re living in an earthquake-free zone. A simple practical sense can help you save more on your homeowners insurance price. If your home is not at risk, there is simply no need to pay extra.

6. Secure Your Home

Before you even sign up for a home owners insurance, take steps in making your home disaster-resistant. This can mean steps like having storm shutters or making roof reinforcements at your home. You can also update your home’s heating, electrical, or plumbing works which can reduce the chances for water or fire damage. You may also get a discount on your homeowners insurance if you take the time in having a home security system installed – from sprinklers, smoke detectors, fire alarms, to burglar systems. Before you purchase these home security devices, know what your insurer will recommend to help you save on your premium.

7. Know the Limits of Your Coverage

You need to read your fine print very well, specially the conditions and coverage part of your policy.
Know that owning certain types of dog can limit your coverage. By knowing what can be included and what cannot, you have an option to buy additional coverage or choose the one that will suit your budgets and needs.

8. Update Your Coverage

You need to review your homeowners insurance policy each year before it is up for renewal. You need to inform your insurance company on changes made to your home, the additional personal properties needing coverage, or the depreciated value of your assets. You may want to have your coverage on personal properties like computers and jewelries reduced or canceled so you can save more.

9. Be Loyal

By staying with the same insurer for several years, you may qualify for special discounts reserved for long-term customers. There are some insurance companies who will give you five to ten percent discount on your insurance premiums if you stay with them for a minimum of three years.

10. Pay Annually

Paying on time can help you maintain a good credit score which will make you get discounts on your homeowners insurance premium. If you can pay your insurance by the year, it can save you up to $5 on your monthly fees.

If you are a new home buyer, you need to check the CLUE ( Comprehensive Loss Underwriting Exchange ) report about the home you are planning to buy. This will help you determine the homeowners insurance price. If you are in a high risk area where your home is insured by a government plan, you may want to add a homeowners insurance plan at a lower cost. If you are employed and your company offers a group insurance coverage, see if it is a better deal than getting your own homeowners insurance plan. Your homeowners insurance price may be an extra price to pay, but for all of the added safety it can give you, it is worth making all that investment. It truly pays to have a peace of mind!

RESOURCES:

Insurance Information Institute. “ 12 Ways to Lower Your Homeowners Insurance Costs. “
http://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm

Dawson, Michele. “ How to Reduce Your Insurance Costs. “ 2009. Move.com.
http://www.move.com/home-finance/insurance/tips-for-reducing-home-insurance-costs.aspx?source=web

About.com. “ Ten Ways to Cut the Cost of Your Homeowner’s Insurance. “ 2009.
http://financialplan.about.com/od/homeownersinsurance/a/Homeowners.htm

Grant, Kelli. “ 6 Ways to Save on Homeowners Insurance. “ October 2008. Smart Money.
http://www.smartmoney.com/spending/deals/6-ways-to-save-on-homeowners-insurance/

National Association of Insurance Commissioners. “ A Consumer’s Guide to Home Insurance. “
1993, 2006. http://www.naic.org/documents/consumer_guide_home.pdf