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15 ways to save on home insurance

Read the Spanish version: 15 maneras de ahorrar en tu seguro de casa

Looking to squeeze the most from your home insurance dollar? Try these practical steps.

1. Shop around for home insurance quotes

Check with several different home insurance companies to get rate quotes. Ask around: Do your friends and family like their home insurance company? Does the company have good customer satisfaction ratings? Insure.com has customer ratings to help you find the best home insurance companies.

home insurance savings2. Raise your home insurance deductible

The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Typically, home insurance deductibles start at $250. The Insurance Information Institute (III) estimates that if you increase your deductible to either $500 or $1,000, you can realize double-digit decreases on your premiums. For example, an increase to $1,000 can save you up to 25 percent. But make sure you can afford to pay the higher deductible out of pocket if something should happen.

3. Buy your home and auto insurance policies from the same insurance company

Most companies will give a multiline discount if you buy both home insurance and auto coverage from them, also known as bundling. It's one of the more significant discounts you can garner, says Michael Barry, spokesperson for the III.

4. Consider insurance when buying a home

If you're looking at buying a home, think about the cost of it. A newer home's electrical, heating and plumbing systems and overall structure are likely to be in better condition than those of an older home. This can lead to lower premiums.

You'll also want to consider the construction of the house and where you live. If you live on the Atlantic Coast, you'll want the house to be able to stand up to wind damage, while on the Pacific Coast, you need to keep earthquakes in mind. Home insurance does not cover these perils; instead, you need to buy windstorm or earthquake coverage separately, adding to your insurance cost.

5. Insure your home, not the land

While your home and its contents are at risk from fire, theft, windstorms and other perils, the ground your home sits on is not. Don't include the value of the land when deciding how much homeowners insurance you need to buy in order to rebuild your house. Your agent can help you assess the right coverage level.

6. Improve security and safety

Items such as dead bolt locks, burglar alarms and smoke detectors can usually bring discounts of 5 percent each, depending on the insurer. Your insurance company may also offer a significant discount of 15 or 20 percent if you install a sophisticated home-security system. If you're thinking about buying such a system, check with your insurer to see which systems qualify for a discount.

7. Stop smoking

Smoking accidents can lead to significant fire damage. Some insurers offer to reduce premiums if no one in the home smokes.

8. Look for senior discounts

Retired people stay at home more and spot fires sooner than working people. Older people also have more time for maintaining their homes. If you're at least 55 years old and retired, you could qualify for as much as a 10 percent discount. But it really depends on the insurer and some companies don't offer the discount, adds Barry.

9. Look for group coverage

Large employers and business associations often work out deals with an insurance company, which includes a discount for employees and members.

10. Stay with a home insurance company

If you've kept your coverage with a company for several years, you may receive special consideration. Many insurers will reduce your insurance rates by 5 percent after you stay with them for three to five years; and some companies will discount you as much as 10 percent loyalty after six years.

11. Check your coverage annually

You want your policy to reflect the value of your home and belongings. If you review your policy every year, you will be able to make the necessary adjustments. If you've remodeled a basement, for example, tell your insurer and make sure your coverage amount is still adequate. Some changes will lead to lower premiums, such as getting rid of a trampoline or pool.

12. Look for private home insurance first

If your property is considered "high risk" and you think you'll be forced to buy home coverage from your state's high-risk insurance pool, check first with an independent insurance agent. You may find that you can still buy insurance at a lower price in the private insurance market than from your state's insurer of last resort.

13. Make EFT payments

Many companies now charge $5 or more for mail payments, so having your payments automatically deducted will help shave off excess cost. Often your payments can come automatically from your credit card.

14. Maintain a good credit history

Many insurers now check your credit and can adjust your price based on your level of "risk" as judged by your credit history, where allowed by state law. Make sure your credit is in good shape when you apply for policies.

15. Consider actual cash value vs. replacement cost

Actual cash value coverage reimburses you for the value of your property at the time of damage or loss, minus your deductible. If you buy this option, you need to account for depreciation of your belongings, which may result in a lower claim payment than you expect.

Replacement cost coverage reimburses the full value of the item lost — after you purchase the new item and submit your receipts. The up-front premium is higher, but you receive full compensation for your possessions and you'll be better off in the end if you have a claim.

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