Money-Saving Tips for Homeowners Insurance - How to Be a Savvy Shopper

For any major purchase, investing a little time and know-how into the selection process can really pay off in the end. The same is true when choosing a homeowners insurance policy. Taking the time to do your homework will help you find the best coverage at the most economical premium.

So how are your rates determined? What you pay depends on various factors including your age, location, type of residence, proximity to a fire department, deductible amount and scope of coverage. And while certain factors are unchangeable, there are still a few ways to save money without skimping on coverage.

Compare and contrast. Insurance rates can vary significantly across companies. Obtain at least three different quotes before buying, and carefully review them to determine which one offers the best combination of coverage and premium.

Use one insurer for multiple needs. Many insurance companies specialize in different areas of insurance, including home, auto, life and health. Sticking with the same company for all your insurance needs may qualify you for a multiple policy discount.

Pick your perils. For owners of single-family, owner-occupied homes, insurance companies offer you a package of policy forms designed to protect your home and belongings against certain perils. The more perils you elect for coverage, the more you will pay for your policy.

Disaster-proof your home. Find out from your insurer how much you can save by adding smoke detectors, installing burglar alarms, switching to shatter-proof glass, reinforcing your roof, and upgrading your heating, plumbing and electrical systems to prevent fires or water damage.

Opt for a higher deductible. Do you rarely file insurance claims? You may want to consider a higher deductible, which will lower your premium. Doubling your deductible from $500-$1,000 can save you up to 25 percent on your premium.

Consider Actual Cash Value Coverage. In contrast to replacement cost coverage, which reimburses the full current value of your property, actual cash value coverage pays you for the amount equal to the replacement value, less the deductible and depreciation. Although this option is less expensive, be sure to talk with your insurer about the risks involved.

So How Much Insurance Do You Really Need?
Mortgage lenders typically require you to buy a minimum amount of homeowners insurance in order to secure a loan. But that amount may not necessarily cover what you truly need. To get a better idea, you may want to obtain an insurance quote (better yet, two or three) for the amount it would cost to rebuild your home; then use that amount as a benchmark for comparison.

For more money-saving tips and ideas, or to start shopping for insurance quotes from multiple carriers, visit www.netquote.com.