How to Get Lower Basic Homeowners Insurance Rates

Insurance experts cite these 12 ways to cut your basic homeowners' insurance rates and premiums.

All homeowners' insurance policies are not created equal, nor do they all cost the same amount. Annual premiums for similar policies can vary by hundreds of dollars, according to the Federal Citizen Information Center.

Here are 12 ways to save on homeowners' insurance compiled by the Insurance Information Institute and endorsed by consumer groups including the Consumer Federation of America and the National Consumers League:

1. Shop around. Ask your friends about their homeowners' insurance carriers, check consumer guides and online insurance quote services. Another good resource is your state insurance department. States often disclose typical rates and the number of consumer complaints received about specific insurance companies. Ask plenty of questions of homeowners' insurance carriers to get a feeling for the type of service they give and what they would do to lower your costs.

2. Raise your deductible. You could cut your homeowners' insurance premiums by as much as 25 percent by raising your deductible from $500 to $1,000. Some policies have separate deductibles for different kinds of damages.

3. Don't confuse what you paid for your house with rebuilding costs. That price includes the land your house sits on. If you include the land value in the amount you insure, your homeowners' insurance premium will be higher.

4. Buy your home and auto policies from the same insurer. You may be able to save five to 15 percent on both policies. But compare with other insurers to be sure.

5. Make your home more disaster-resistant. Your homeowners' insurance representative can tell you what steps you can take to make your home more resistant to windstorms and other natural disasters. For example, steps like adding storm shutters, reinforcing your roof or buying stronger roofing materials can save you money on your homeowners' insurance premiums.

6. Improve your home security. You can usually get discounts of at least five percent for a smoke detector, burglar alarm or dead-bolt locks. Depending on the insurer, you could cut your homeowners' insurance premiums by 15 to 20 percent by installing high-end sprinkler systems as well as fire and burglar alarms.

7. Ask about other discounts. Some companies discount homeowners' insurance premiums for retired people because they tend to be home more often. Some employers and professional associations offer group homeowners' insurance with lower rates, and some insurance companies offer discounts for members of certain professional groups.

8. Maintain a good credit record. Insurers often use credit information to price homeowners' insurance policies.

9. Stay with the same insurer. Some insurers will reduce their homeowners' insurance premiums by five percent if you stay with them three to five years, and by 10 percent if you keep the policy for six years or more.

10. Review the limits in your homeowners' insurance policy and the value of your possessions at least once a year. You may be able to cancel extra insurance for items whose full value is not covered under your regular policy, such as expensive jewelry or valuable art work.

11. Look for private insurance if you are in a government plan. You may be able to buy homeowners' insurance at a lower price in the private market.

12. When you're buying a home, consider the cost of homeowners' insurance. Your premiums may be lower if your house is close to a fire hydrant or if, for example, your neighborhood is served by a professional rather than a volunteer fire department. You may also qualify for lower premiums if your electrical, heating and plumbing systems are less than 10 years old. You can check the Comprehensive Loss Underwriting Exchange (CLUE) report of the home to see the homeowners' insurance claim history of the property.

The full list of ways to save on homeowners' insurance, and links to state insurance departments, is available at www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm. For other tips on homeowners' insurance, you also can visit the Insurance Information Institute's Web site at www.insurance.info, or www.iii.org.

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