10 Key Tips to Save on Home Insurance

Recent increases in home insurance premiums point up once again the importance of shopping around for the best deal. Some portion of this price increase is due to the huge number of people who have in recent years moved into larger homes or improved their existing homes. When there is more (and more valuable) property to insure overall, then higher homeowner policy premiums result.

An additional contributing factor is the increased severity of natural disasters since the early 1990s. Since then insurers have paid out over $100 billion for catastrophe-related losses, which works out to an average of some $700 million per month. In addition to the well-known hurricanes and California’s Northridge earthquake, many hundreds of smaller conflagrations have occurred – such as storms, wildfires, avalanches, floods – and every region of the country is at risk for some sort of billion-dollar disaster.

Sharp increases in construction costs are also impacting insurance premiums. Due to these increases, the average homeowner is probably not carrying enough property insurance to cover the cost of replacing his or her home in the event of catastrophic damage.

Top ten tips
1. Do your homework – Again, nothing “goes without saying” any more, so remember to do your research before buying a policy. Your home's insurance loss history will come into play right away, so closely inspect the structure to ensure that all repairs were properly made. The CLUE and A-PLUS databases maintained by insurers document the claims history of both properties and homeowners.

2. Raise your deductible – The other way of looking at this is that you are lowering the insurer’s exposure by taking on more of the liability yourself. Raising the deductible on your home insurance could potentially result in savings of 15 to 25 percent or more.

3. Upgrade your home – If you modernize your heating, electrical and plumbing systems you will reduce the future risks of fire and water damage. When you make these upgrades, keep complete records and share them with any potential insurers.

4. Protect your investment – In addition to the other upgrades, you should make your home as resistant to windstorms and other regional natural disasters as possible. You will save on your premiums if you repair/reinforce your roof, add storm shutters or otherwise retrofit your home with newer materials to make it more resistant to natural calamities.

5. Follow the insurance company’s advice – In the foregoing examples where you are doing construction-related upgrades, different insurance companies have different recommendations. If you follow the guidelines set by the insurer, you will see greater reductions in your premiums.

6. Improve security – Premium discounts of 5 percent or more are usually granted following your installation of smoke detectors, dead-bolt locks and window/door alarms. Insurers will tell you exactly what they expect in this department to get the most premium savings.

7. Go high-tech – Some companies will discount your premium by as much as 15 or 20 percent after you install state-of-the-art sprinkler system or a sophisticated fire and burglar alarm system that automatically contacts the police, fire department or other emergency service. These are costly systems and not all of them will get you the hoped-for discount. Once again, find out what exactly what your insurer advises, what the system costs and how much your premium savings might be before you move ahead with installation.

8. Get all of your insurance policies from one company – All companies will reduce your premiums, by 5 to 15 percent or more, if you buy multiple policies.

9. Keep your credit rating healthy – Insurance companies are using credit-based scoring to determine coverage amounts and premiums for homeowner’s policies. Even if your credit is not perfect, the thing you want to be aware of is not letting it go any lower. Pay your bills on time and do everything else you can do to keep improving your credit score (and resulting “insurance score”).

10. Check and recheck regularly – Every six months, or year at the most, you need to review all of your policies (home, health, life, auto, etc.). Your situation changes, the amount you need to insure increases as you age and prosper, and the rates and policies of your insurer(s) might also change. Do a regular insurance policy review, and don’t rush through it or you may overlook a way to save money. In today’s economy, no one can afford to do that any more!

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ClickInsure is a leading broker for health, life, auto and home insurance in California. When you need great advice or want to auto insurance quotes be sure to visit ClickInsure.com.

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