This post is from Angela Colley at partner site Money Talks News.
Homeowners insurance is one of the most expensive things we pay for that we hope to never use.
In 2009 (the last year the information was available) the average homeowners insurance premium was $880, according to the Insurance Information Institute. But premiums go much higher in some areas. For example, in my home state of Louisiana the average premium was $1,430.
While you're forced to pay homeowners insurance, you don't have to pay top dollar.
Watch the short video below for tips from Money Talks News founder Stacy Johnson, then read on for more.
1. Raise your deductible
Raising your deductible is one surefire way to lower your monthly homeowners insurance premium. As Stacy put it:
"The more loss you'll pay, the less your insurance will cost. Raising your deductible from $250 to a thousand dollars could slash your premium by 10 to 30 percent. A lot of savings, not a lot of extra risk."
If you have an emergency fund, you can use some of that money to pay your deductible should you ever have to file an insurance claim. (A flood, house fire or robbery qualifies as an emergency to me.)
If you don't have an emergency fund, check out 4 Steps to Saving More to learn how to build one. Then call your insurance provider and raise that deductible.
2. Disaster-proof your property
If you upgrade your home, you might save on homeowners insurance. For example, your provider may give you a discount for having weather-resistant features: My company offers a discount for storm shutters and stronger roofs since I'm in an area prone to high winds and flooding.
Call your insurance provider before spending any money, and ask what improvements will result in a lower premium.
3. Install security features
In 2009, burglary victims (in all structures, including homes) lost an estimated $4.6 billion to property damage and theft, according to the FBI. And as Stacy reported, smoking causes 23,000 fires every year.
Your insurance provider may offer discounts if you install safety features. For example, the Insurance Information Institute reports that you can save at least 5% by adding a security alarm, a deadbolt lock or a fire extinguisher. Upgrade to a more advanced security feature – like a security alarm that automatically dials the police – and you could save up to 20%.
4. Review your insurance riders
Periodically review any insurance policy riders -- basically, extra coverages at added cost -- and make sure you still need them. I once carried extra insurance on my jewelry, to the tune of $96 a year. I later sold the jewelry but forgot about the rider for another year, thus wasting $96.
5. Ask for discounts
As Stacy mentioned in the video, many discounts are available beyond installing safety features and disaster-proofing. For example:
- Multi-policy discounts
- Senior citizen discounts
- Nonsmoker discounts
- Claim-free discounts
- Marital status discounts
The discounts offered vary by provider. Call your company and ask for the full list.
6. Find a dog-friendly insurer
I'm the proud parent of a 50-pound, full-blooded pit bull. People love to tell me I'll never be able to find homeowners insurance with an "aggressive breed." They're wrong.
If you own a large dog -- or a breed labeled as aggressive -- you might have a harder time finding homeowners insurance, but you don't have to pay an outrageous premium. A few providers will approve you at a decent rate after a home check, or if you can provide a vet reference. In my case, an agent visited my home and checked out my dog before quoting a premium.
The charity group Pit Bull Rescue Central has a list of "all breed-friendly" insurance providers. The American Kennel Club also has some helpful links on its Homeowners Insurance Resource Center page.
7. Shop around
Just because you got a great deal on homeowners insurance years ago doesn't mean you're getting a great deal today. Rates can change, and so do situations. Once a year, shop around. You can do that right on the Money Talks News Insurance page -- it takes only a few minutes. And if you do decide to replace your existing policy, make sure the new policy is in place before you drop the old.
8. Don't insure your lot
This may sound obvious, but if you paid $200,000 for your house, you don't need to have $200,000 worth of coverage, because part of the purchase price included the lot your house sits on. It's not going to burn down or get stolen.
9. Inventory your possessions
One of the silliest things people do is pay a lot of money to insure their stuff, then fail to have an inventory when they lose it all. No matter how nice your insurance company is, it's not going to pay to replace things you can't remember or prove you had. And nobody can remember every single item in the house, from dishes to socks.
If you don't follow any other advice in this article, at least do this: Take your cellphone or other camera and walk around your house making a video of everything you have. Open drawers and closets -- get it all. Then send that video to a faraway friend. If disaster strikes, that will be the smartest hour you ever spent.
10. Don't be penny-wise and pound-foolish
While the goal in reviewing insurance is to save a buck or two, don't lose sight of the ultimate goal: protecting your property. Make sure you maintain adequate liability and other coverages at all times. Double-check to see that your policy provides for replacement coverage, not coverage that will reimburse only depreciated values.
If you're running a business from your home, be aware that without notification (and perhaps a rider at extra expense) the insurance company may refuse business-related claims. For example, if the UPS driver trips on your front porch while delivering a business-related package and sues, the expense may not be covered by your homeowners policy. When in doubt, ask.
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