How To Cut Your Homeowner’s Insurance

Safe-proofing your home can save you money

If you are carrying a mortgage, you know that most lenders require that you have some kind of homeowner’s insurance. The expense of being overinsured, however, can be a burden, one that can be avoided if you take advantage of discounts. Simply installing dead bolts or even staying with the same insurance company can shave hundreds of dollars off an insurance policy.

Luckily for Sandra Housch, a healthcare manager living in Detroit, the brick home she bought last November was spared after killer storms slashed through her neighborhood in July. Tornadoes claimed the lives of several people and caused more than $135 million in property damage, ranging from torn-off roofs to flattened buildings. Since close to 60% of the homeowners most affected had no insurance, Gov. John Engler’s attempts to get federal disaster relief were futile. Housch’s close call was reason enough to review her $150,000 policy and make sure she was protected as much as possible. “The only reason I didn’t shop around was because I was satisfied with the work of the same agent who sold me my renter’s insurance policy,” she says. “I knew the company had a history of good service.”

The benefits of company loyalty can translate to saved dollars, according to the Insurance Information Institute, a nonprofit communications organization in New York that advises consumers nationwide on ways to cut insurance costs. Loyal customers, crucial in the intensely competitive market, may have their premiums reduced by as much as 5% for maintaining a policy for three to five years (10% for more than six years).

Housch was already receiving another discount for maintaining her car insurance with the same company, and at the advice of her agent, the security system she installed increased her savings by another 10%.
Even her choice in style of home–a solid brick two-story in the Midwest that can hold up against wind damage–saved money. (Wood-frame homes tend to garner higher discounts in quake-heavy areas like California.) And if someone in your household needed another reason to stop smoking, the fact that 23,000 residential fires a year start this way has insurers offering lower premiums if all residents are nonmokers. Other information like the total number of smoke detectors and fire extinguishers in your home, or the house’s proximity to fire hydrants can help to lower your premiums. Insurers may not automatically give you these savings; make sure to discuss discounts with your agent.

Besides the safeguards against natural disasters, securing your home from theft is one of the best ways to reduce costs. More than 1.5 million home burglaries occur each year; nine out of 10 could have been prevented by simple common-sense measures. The Insurance Information Institute recommends that you “case your place,” so that you operate from a position of power when it comes to your home and family’s protection. Are your outdoor lights on at night? Does the place look obviously empty when you’re on vacation?

One of the most important safeguards is a written or video inventory of your possessions,

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