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SHOP
AROUND
Friends, family, the phone book and Internet are some of the
sources you can use to find homeowners insurers. Get a wide
range of prices from several companies. But don't consider price
alone. The insurer you select should offer both a fair price and
excellent service. Quality service may cost a bit more, but you
buy insurance in case you need to make a claim, so it's
important to get a company with a good reputation. Talk to a
number of insurers to get a feeling for the type of service they
give. Ask them what they would do to lower your costs. Check the
financial ratings of the companies with AM Best or Standard and
Poor's.
RAISE YOUR DEDUCTIBLE
Deductibles are the amount of money you have to pay toward a
loss before your insurance company starts to pay. Deductibles on
homeowners policies typically start at $250. Increase your
deductible to
$ 500 -- save up to 12 percent
$1,000 -- save up to 24 percent
$2,500 -- save up to 30 percent
$5,000 -- save up to 37 percent
BUY YOUR HOME AND AUTO POLICIES FROM THE SAME INSURER
Some companies that sell homeowners, auto and liability coverage
will take 5 to 15 percent off your premium if you buy two or
more policies from them.
WHEN YOU BUY A HOME...
Consider how much insuring it will cost. A new home's
electrical, heating and plumbing systems and overall structure
are likely to be in better shape than those of an older house.
Insurers may offer you a discount of 8 to 15 percent if your
house is new. Check the home's construction: In the East brick
is better, because of its resistance to wind damage, and in the
West frame is better, because of its resistance to earthquake
damage. Choosing wisely could cut your premium by 5 to 15
percent. Avoiding areas that are prone to floods can save you
about $400 a year for flood insurance. Homeowners insurance does
not cover flood-related damage. The closer your house is to
firefighters and their equipment, the lower your premium will
be.
INSURE YOUR HOUSE, NOT THE LAND
The land under your house isn't at risk from theft, windstorm,
fire and the other perils covered in your homeowners policy. So
don't include its value in deciding how much homeowners
insurance to buy. If you do, you'll pay a higher premium than
you should.
IMPROVE YOUR HOME SECURITY AND SAFETY
You can usually get discounts of at least 5 percent for a smoke
detector, burglar alarm, or dead-bolt locks. Some companies
offer to cut your premium by as much as 15 or 20 percent if you
install a sophisticated sprinkler system and a fire and burglar
alarm that rings at the police station or other monitoring
facility. These systems aren't cheap and not every system
qualifies for the discount. Before you buy such a system, find
out what kind your insurer recommends and how much the device
would cost and how much you'd save on premiums.
STOP SMOKING
Smoking accounts for more than 23,000 residential fires a year.
That's why some insurers offer to reduce premiums if all the
residents in a house don't smoke.
SEEK OUT DISCOUNTS FOR SENIORS
Retired people stay at home more and spot fires sooner than
working people and have more time for maintaining their homes.
If you're at least 55 years old and retired, you may qualify for
a discount of up to 10 percent at some companies.
SEE IF YOU CAN GET GROUP COVERAGE
Alumni and business associations often work out an insurance
package with an insurance company, which includes a discount for
association members. Ask your association's director if an
insurer is offering a discount on homeowners insurance to you
and your fellow graduates or colleagues.
STAY WITH AN INSURER
If you've kept your coverage with a company for several years,
you may receive special consideration. Several insurers will
reduce their premiums by 5 percent if you stay with them for 3
to 5 years; by 10 percent if you remain a policyholder for 6
years or more.
COMPARE THE LIMITS IN YOUR POLICY TO THE VALUE OF YOUR
POSSESSIONS AT LEAST ONCE A YEAR
You want your policy to cover any major purchases or additions
to your home. But you don't want to spend money for coverage you
don't need.
LOOK
FOR PRIVATE INSURANCE FIRST
If you live in a high-risk area, one that is especially
vulnerable to coastal storms, fires, or crime, and have been
buying your homeowners insurance through a government plan, you
should check with an insurance agent or company representative.
You may find that there are steps you can take that would allow
you to buy insurance at a lower price in the private market.
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