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Homeowners Insurance Rate Discounts
Home insurance covers damage and replacement costs to property, structures and possessions. Depending on the amount of property insured, the cost of insuring a house and possessions can become expensive. If an individual is insuring a house that is in a “high risk” area such as an earthquake zone or flood plain, the costs of insuring the home can be even more expensive.
Guidelines for Saving Money on Rates
There are steps homeowners can take to help reduce costs of homeowners insurance rates. Not all of these will be applicable in all states. Home insurance discounts and lower prices can usually be obtained by following a few general guidelines:
- Compare prices – Different insurance companies charge different rates. Collecting a few quotes from different companies gives a homeowner the ability to choose the plan that best suits their financial needs. Also, by visiting with agents or calling different companies, homeowners can get a feel for how the company may interact with them should there be a claim.
- Raise the deductible – A higher deductible means lower premiums to pay. Keep in mind that should disaster hit, an individual should be able to pay the higher deductible if he or she wants to fully repair or restore property damage. Also, depending on the location of the home, the homeowner may be required to own separate insurance for different types of disasters. These separate policies each have their own deductible which can also be raised to provide lower premiums.
- Purchase multiple insurance policies from the same company – Most companies will provide discounts on home insurance policies if the homeowner also purchases their auto insurance from the same company. Usually, the more policies purchased from the company, the more each individual policy is discounted.
- Build in protection – Making small and large improvements to a home in order to make it stronger and less vulnerable to common disasters can lower the home insurance rate. Reinforcing roofs in windstorm-prone areas or retrofitting an older home in an earthquake zone are two examples.
- Insure the house, not the land – The purchase price of a house includes the land value as well. Since land cannot be stolen and is generally less prone to damage than a house, its value doesn’t need to be included with insurance rebuilding costs. Insure the house, not the land.
- Security systems – Fire alarms and monitored security systems often provide homeowners a discount through the insurance company. Some locking systems and sprinkler systems for fire also qualify. Since not all security systems and measures qualify for discounts and others are expensive, a homeowner should check with the insurance company to see what systems qualify for a discount before purchasing or installing the system.
- Ask – Ask the insurance company what kinds of discounts they offer. Different companies offer different discounts and incentives.
- Group insurance coverage – Some homeowners insurance rate discounts is available through groups such as alumni organizations or professional associations.
- Long-term discounts – Some insurance companies offer discounts to homeowners who stay with them for long periods. Homeowners should still periodically compare their insurance price with that of other companies.
- Review policies annually – If improvements have been made or expensive furnishings acquired, then the amount of coverage on a home insurance policy needs to reflect these changes. Furthermore, if certain possessions have lost value or are no longer around, then there is no reason for the insurance policy to protect their value.
- Private vs. Government – Some homeowners in high-risk areas can purchase insurance through the government. Sometimes homeowners insurance rate discounts can be found by searching out private companies that may be able to sell in the area and comparing prices.
- Calculate insurance before purchasing – by investigating risks before purchasing a house, a homeowner (or in this case, prospective buyer) can determine the approximate cost of insurance before purchase.
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