How to Pay Less for Homeowners Insurance

By Steve Gillman - 2009

The most common advice on how to pay less for homeowners insurance is to get several quotes on your before buying a policy. This is a good start, since the difference in cost from one company to another can be significant. Checking rates is easy either by phone or on the internet, but their is a problem here. Policies are not quite the same, making comparison tricky.

Our insurance company, for example, requires that the coverage for the contents of the house be half of the value of the house, while the rules for others will be different. Since we don't own that many valuable things, we don't like paying for that coverage, but the policy still happened to be the cheapest available. Other companies will sell only "replacement value," policies. These varying rules and requirements mean you won't always have an easy time making direct comparisons.

One solution is to buy the cheapest policy that meets your needs, regardless of whether it is as "good" as another policy or not. Insurance is meant for unexpected expenses, after all, not to "win" something extra if your home happens to be destroyed. So determine how much coverage you need for the house, what it would cost to replace your possessions, how much liability insurance you need to feel comfortable, and what deductible amount you can afford to pay.

Ask for a quote from each insurance company for whatever policy they can sell that comes the closest to your needs, according to the homework you did. Check the companies for safety, though, so you can be sure they'll be there when you need them. Type "insurance company ratings" into a search engine to find free information. Find the cheapest of the quotes from a secure company and buy it. If you have "extra coverage" you don't want in some areas, that's okay now. You'll still have a lower premium overall.

A Few More Homeowners Insurance Tips

Consider carefully how much of a deductible you can afford, because higher is almost always better if you want to save money. You may feel uneasy having to pay the first $1,000 of a claim, but remember that claims are rare, and if you want to you can bank the money saved on premiums until it adds up to $1,000. An advantage of this strategy is that if you never have a claim you get to keep the money.

Make your home safe by installing smoke detectors, deadbolts, and other low-cost items the insurance company recommends. Buy the necessary fire extinguishers for your home. Do these things and you can get a reduced rate on the policy.

Try at least one independent agent when getting quotes. She can get several quotes that may save you money or provide a more appropriate policy for your needs, because independents are not limited to trying to sell you the products of one company.

Explore special discounts. For example, non-smokers may get a discounted rate. or you may get a discount for insuring your home and car with the same company (total the costs of the two policies when comparing quotes in this case). There may be a discount for security alarms. Be sure to ask each agent about any other ways to pay less for your homeowners insurance policy.

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