8 Ways You Can Save $ on Your Homeowners Insurance
By Nancy A. Nicklow, CPCU, AAI
President, W. Ray Huff & Associates, Inc.
Your home is probably your most valuable asset. It is also a huge risk for you financially. What if something happens to it? A fire? A flood? Vandalism? What if someone visiting you slips, falls and suffers a serious injury? And sues you? An accident like that could put a dent -- or worse -- in your financial security. For most people, insurance is a mystery.
8 Ways to Save $
1. One Insurer, Multiple Policies -- Do you have an automobile insurance policy? If so, is it with the same insurance company that provides your homeowners insurance? If the answer’s no, you’re paying too much -- for both policies.
2. Raise Your Deductible -- The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $250 deductible and you file a claim for $1,000 in damage to your home, you pay the first $250 and your insurer pays the balance, $750. The higher the deductible you choose, the more you pay. Also, though, the higher deductible, the less you have to pay for your policy.
3. New Is Better -- Insurers really like newer homes. That’s because it’s less likely something will go wrong with the electrical, heating and plumbing systems
4. Location, Location, Location -- If your home is near a fire station, you will pay less for homeowners insurance. If you have fire hydrants within 1000 feet you will pay less.
5. Insure the House, Not the Land -- Nobody is going to steal your land. Fire and high winds won’t “destroy” it. As such, when deciding how much homeowner’s coverage to have, don’t include the value of the land, only the value of the house and any other buildings on the property.
6. Better Safe(r) Than Sorry -- Smoke detectors, burglar alarms and deadbolt locks are usually worth discounts of at least 5%. You can get even bigger discounts, 15% to 20%, if you install a sophisticated sprinkler system or an alarm system that rings at the police station or a security company.
7. Where There’s Smoke . . . -- There’s fire. Smoking (unattended cigarette butts, etc.) produces more than 23,000 residential fires in this country each year. That’s why some insurers have discounts if all the residents in a home are nonsmokers.
8. Don’t Jump Around -- If you’ve been with an insurer for a while and you like that insurer, stay put. Some insurance companies automatically have discounts for policyholders who have been with the companies for a certain number of years. For example, 5% for at least three years, 10% for at least five years.