Six Ways to Save on Homeowners Insurance

Smart Money lists six ways to save on homeowners insurance as follows:

• Maintain a healthy credit score
• Inquire about discounts
• Increase your deductible
• Disaster-proof your home
• Monitor neighborhood changes
• Pay promptly

This is a good list IMO. Here's what we do on each of these suggestions:

1. Yep, you can save a bundle on your homeowner's insurance if you have a good credit score. We saved 44%.

2. I called my agent the other day just to make sure we were getting all the discounts possible. We were.

3. We keep our deductible VERY high (and have increased our emergency fund accordingly) and will only make a claim in case of a major problem. Any other (slight) amount of damage, we'll pay ourselves. Our perspective on insurance is that it's there to protect against catastrophic loss and everything else is to be paid by us.

4. I need to work on this. I check our fire alarms regularly, but I read somewhere that they should be replaced every 10 years or so. Anyone know anything about this? And we do have a fire extinguisher, but I'm not sure where it is -- not good at all!

5. Our neighborhood actually just started a neighborhood "association" that's designed to help us all get to know each other and work together to make our neighborhood a better place. My wife is a "section leader" in this new group.

6. This applies to ALL insurance -- pay on time. You risk being dropped if you pay late, so be sure you plan accordingly and pay before the due date.

Comments

[SAHM]

Increasing your deductible is one of the best options. Most mtg companies require a max of $1,000 or $2500, so check with them first if you have a mtg. As a former HO underwriter, we looked very carefully at the policies that had lots of "zero paid" claims, especially when there was a small (less than $1,000) deductible. We would either force (yes, we could do that) people to take a higher deductible or look elsewhere. We were just waiting for "the big one".

With regards to paying promptly, when you are late, it invites the underwriter to review your policy. They do not have to accept a late payment, especially if you went without coverage for even a small period of time.