Understanding Homeowners Insurance Savings

As the cost of living continues to rise, it's important to know about ways you can save on your home insurance policy while maintaining the level of coverage you need.

Whether you've owned your home for years or are a first-time buyer, being an informed shopper empowers you to compare and choose the right insurance company. Find the company that offers both the coverage you need and the right price.

10 Steps to Saving Money on Home Insurance:

1. Shop Around
The easiest way to shop for a home insurance policy is to go to the Internet or ask friends or family. You can contact many different agencies to find the best policy for you; or you can go to a site like NetQuote where you can fill out one form and get several quotes from the top insurance agencies. Just make sure you compare at least 3 Home Insurance Quotes

But price shouldn't be the only consideration. Your insurer should offer both a fair price and excellent service. Going with a company that has a better reputation may cost a bit more, but you buy insurance in case you need to make a claim, so it's important to get a company that has excellent service. The more insurers you talk to will you give you a better understanding on what type of service they give. Find out what they can do to lower your costs and check the financial ratings of the companies with AM Best or Standard and Poor's.

2. Raise Your Deductible
A deductible is the amount of money you have to pay toward a loss before your home insurance company will begin to pay. Deductibles on homeowners' policies typically start at $250. If you increase your deductible, you might save:

By $500, you can save up to 12 percent
By $1,000, you can save up to 24 percent
By $2,500, you can save up to 30 percent
By $5,000, you can save up to 37 percent
These numbers will depend on your insurance company. But make sure if you have to make a claim, you can pay your deductable.

3. Ask About a Multi-Policy Discount
Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.

4. Consider Insurance When Buying a Home
A new home's overall structure, including heating, electrical and plumbing systems, are probably in better shape than those of an older house. Your insurance agency may offer you a discount of 8 to 15 percent if your house is new.

Check the home's construction. Also, the closer your house is to firefighters and their equipment, the lower your premium will be. Choosing your new house wisely could cut your premium by 5 to 15 percent.

5. Insure the House; Not the Land
The land under your house isn't at risk for theft, windstorm, fire and the other perils covered in your homeowners policy. So don't include its value in deciding how much homeowners insurance to buy. If you do, you'll pay a higher premium than you should.

6. Install Home Security and Safety Devices
If you have a smoke detector, burglar alarm, or dead-bolt locks, you can usually get discounts of at least 5 percent.

Choose wisely when installing sophisticated alarms that ring at the police station or other monitoring facility. Some companies offer to cut premiums by as much as 15 or 20 percent if you install these systems, but not every system qualifies for the discount. Before you buy, find out what kind your insurer recommends and how much you'd save.

7. Stop Smoking
Smoking accounts for more than 23,000 residential fires a year. Some insurers offer to reduce premiums if all the residents within the house do not smoke.

8. Ask about a Senior Discount
Retired people stay at home more. This allows them to spot fires sooner and they have more time for maintaining their homes. At some companies, if you're at least 55 years old and retired, you may qualify for a discount of up to 10 percent.

9. Check Your Limits Once a Year
Compare your limits in your policy to the values of your possessions once a year. You want your policy to cover any major purchases or additions to your home, but you don't want to spend money for coverage you don't need.

10. Look for Private Insurance
If you live in a high-risk area, meaning one that is vulnerable to coastal storms, fires, or crime, you should check with an insurance agent or company representative about a private insurance plan. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.

See how much you could save today on your home insurance. Get your free home insurance quotes today!