Are you receiving the best homeowners insurance for your dollar?
Posted March 21, 2010
It’s wise to make sure you’re getting the best price on your homeowners insurance. And it’s equally wise to compare your rates with your agent’s customer service to make sure you’re receiving the best value for your dollar.
Markets change, and one company that offered great rates a couple years ago might now have some of the highest rates. Also get a quote on line. This will give you a starting point to know what each of the quoted companies will charge. Make sure you receive identical quotes (liability, personal property coverage, deductibles, etc.) so you can properly compare the policies.
Price isn’t the only thing you’re purchasing, however. You should also consider their customer service. Ask friends and family for referrals before you start shopping.
Raise Your Deductible
The amount you pay toward your loss prior to your insurance company pays the claim is your deductible. The norm is $500, but the higher the deductible; the lower your rates will be because you are taking more of the risk up front. By doubling the deductible, it is possible to save up to 25%!
Purchase All Policies From The Same Insurer
Many insurance companies carry homeowners, liability and auto insurance. This will provide a multi-policy discount. Also, if you’re a homeowner, check to see if they carry commercial insurance as well. This could net you an additional discount.
Stay With An Insurer For At Least 3 Years
As a long-term policy holder, you might receive a reduced premium. Some companies offer 5% for retention of 3 to 5 years, and increase it to 10% if you remain for 6 yeas or more.
Know Your Credit Score
Credit information is acquired to help the insurance company determine your premiums. Check your credit score periodically and correct any errors. Then when shopping for insurance, if they state you received a higher rate due to your credit score, you’ll know whether they received an accurate report.
Compare Policy Limits And The Value Of Your Possessions Annually
This will prevent you from spending more than you need to spend. If you have riders on jewelry, fine art, etc., and have sold or given some items away, make sure those riders are cancelled.
Thinking Of Buying A Home? Take Your Insurance Premium Into Consideration
Often insurance is less expense if the electrical, heating and plumbing systems are less than 10 years old. Buying a house close to a fire hydrant or in a community that is served by a professional fire department rather than volunteers will also affect your premium.
Safety And Security Discounts
Most insurance companies offer a 5% or 10% discount for a smoke detector, alarm or dead-bolt locks. Sprinkler systems might also provide additional discounts, and possibly an alarm that rings at the police or fire department. These can be costly, so do a cost analysis to ensure that you’ll reap enough pay-back through your discounts from your premiums to justify purchasing them.
Inquire About Other Discounts
These vary from state to state and company to company. Many offer discounts to people 55 and over. Some provide a discount for retirees. Often membership in special groups organizations such as alumni and business associations will entitle you to a discount.
This is not a complete list, but some of the most common ways to save money on your premiums. Discuss these and ask your agent about other opportunities to reduce the cost of your premiums.
Cindy Hartman is President of Hartman Inventory LLC, a woman-owned business that provides business and home inventory services for estate planning, estate settlement, financial planning, disaster recovery and more. Her website is HartmanInventory.com.