How To Lower Your Homeowners Insurance Premium

There are several ways in which to lower your homeowners insurance premium. Some are relatively quick and simple while others may involve a litle work and investment. Many factors involved in homeowners insurance rate determination are beyond your control in the short term, such as your home's location, age, etc.. With a little investigation, you can find out how to reduce these costs and , in many cases, the savings could be significant.

Listed below are several ways you can reduce your home insurance premium:

1. Increase your deductible. Raise the deductible on your policy to a level at which you are comfortable financially. The main reason for homeowners insurance is to cover you for the major events (fire, wind damage, etc.). It shouldn't be used for small things such as a broken window or minor theft. Raise the deductible above the level where your insurance company would likely not have to pay for small claims and your rates could come down several percent.
   
   
2. Update your wiring and plumbing. One of the biggest causes of homeowners claims is fire and flooding due to interior plumbing problems. This is especially true if you own an older house. Older homes typically have older wiring and plumbing fixtures. These issues typically are caught in an inspection prior to sale or may be known by your insurance company per the home's underwriting history.
   
   
3. Shop around for lower rates. Allthough this is a no-brainer, it's important to periodically check how your current premium compares with offers from other companies. Many times, if you stay with a company for a longer period, then they may be taking advantage of your loyalty with higher than market rates. If anything, it makes sense to review what the market rates are as a way to encourage your current company to give you a reduction. Check out a few online insurance quotes sites such as Insureme to compare homeowners insurance rates. It's free and only takes a few minutes. You may save 10-20% with very little effort.
   
   
4. Upgrade or install a home security system. Insurance companies are known to lower home insurance premium's by as much as 10% just by installing a home security system or upgrading to a better system with 24-hour monitoring. The insurance cost savings may actually be enough to pay for the monitoring service. Companies such as ADT and Gaurdian will install and, if you upgrade, monitor your home as well.
   
   
5. Combine your auto and homeowners policy. This is often an overlooked way to save money on your combined premiums. Many insurance companies will give you discounts of 10% or more if you combine your auto and home insurance coverage with them. You can also compare other companies combined discounts as well and compare their offers to your current insurance company's rate.
   
   
6. Land vs. Home Replacement Cost. Avoid including the cost of the land your home sits on when figuring out the cost to rebuild. Only the replacement cost of the home itself should be considered; how much the home would cost to rebuild today. Be sure, however, that your insurance company isn't overstating the replacement cost for your home. Older construction techniques with stone and brick homes would be much more expensive today, however, a replacement home woudn't have to be identical to the old home.
   
   
7. Improve or maintain your good credit rating. This is a trend that more and more insurance companies are looking at , even for homeowners insurance. Consumer credit scores are considered by insurance underwriters as a good predictor of future claims. Even if you think this is unfair, it is legal and most companies use this in determining rates. Be sure to keep a solid credit score and/or look to improve it at all times. You can get a free one every year from the 3 credit buroughs at annualcreditreport.com. It doesn't cost you anything by law and you don't have to sign up for a rediculous monthly monitoring service either.

Want to find a lower homeowner insurance rate?

If you would like to see if you can save some money compared to your current homeowners insurance or if you are buying your first home, then we suggest that you compare policies and rates from as many insurance companies as you can prior to buying a policy. We recommend Insureme who allows you to compare several home insurance policies from major highly rated insurers. They are also unique in that they include quotes from dozens of local insurance agents in your area. In many cases, independent agents may be able to give you a better deal for the privilege of you becoming one of their customers.

This should not be considered financial advice which can only be given by a qualifed financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.

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