1. Shop Around
It’ll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department.
The National Association of Insurance Commissioners (www.naic.org) has information to help you choose an insurer in your state, including complaints.
States often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.
Also, check consumer guides, insurance agents, companies and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices.
But don’t just consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim.
So, in assessing service quality, use the complaint information cited above and talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs.
Check the financial stability of the companies you are considering with rating companies such as A.M. Best (www.ambest.com) and Standard & Poors (www.standardandpoors.com) and consult consumer magazines. When you’ve narrowed the field to three insurers, get price quotes.
2. Raise Your Deductibles
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy.
The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least 500.
If you can afford to raise your deductible to 1000, you may save as much as 25 percent.
Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage.
If you live near the East coast (in U.S.), you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area (California), your earthquake policy has a deductible.
3. Buy Your Home And Auto Policies From The Same Insurer
Some companies that sell homeowners, auto and liability coverage will take 5 – 15 percent off your premium if you buy two or more policies from them.
But make certain this combined price is lower than buying the different coverages from different companies.
4. Get Secure
You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks.
Some companies offer to cut your premium by as much as 15 – 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings the police, fire or other monitoring services.
These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on your premiums.
5. Watch Your Credit Report
Establishing a solid credit history can cut your insurance costs too. Insurers are increasingly using credit information to price homeowners insurance policies.
In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied.
6. Stay With The Same Insurer
If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder.
Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.
7. Review Your Policy Limits Annually
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.
If your five-year-old fur coat is no longer worth the 5000 you paid for it, you’ll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers or electronics and valuable art work) and pocket the difference.
If you have any questions about insurance for any of your possessions, be sure to ask your agent or company representative when you’re shopping around for a policy.
For example, if you run a business out of your home, be sure to discuss coverage for that business.
Most homeowners’ policies cover business equipment in the home, but usually only up to 2500 and they offer no business liability insurance.
So, always ask around because it could save you a lot of money over the course of time.
