Lowering Your Home Insurance Premiums

Home insurance premiums, like all other insurance premiums, tend to continue to increase over time. There are things you can do to help minimize your home owner insurance cost and in some cases, even reduce the premiums significantly.

How Premiums Are Determined

Home owner insurance premiums are based on a number of factors. Some of them, like actuarial data, are not really within your control. Others, however, can be affected by small changes you make to the home or to your lifestyle. Take these steps to reduce your insurance premiums:

Step One

Analyze your amount of coverage. The more you are insured for, the more expensive it will be. Did you have coverage for a collectible that you've since sold? Have you paid off your mortgage so that you can afford to cancel your mortgage payment insurance? Take a look at your current circumstances and see if you can adjust your coverage and reduce your premium.

Step Two

Combine your insurance coverage to save. Do you have an auto policy with one company and your home owner policy with another? Check with both to see if either would give you a discounted rate to get the additional business. You can often save a significant amount on your auto policy (15-50%) when you add your home owner policy to the same package.

Step Three

Reduce your risks to decrease your insurance costs. Installing hard wired smoke and fire alarms, adding fire extinguishers in your kitchen and garage, or installing a sprinkler fire alarm system can significantly reduce premiums because they reduce the risk of costly damage. To reduce the risk of vandalism and burglary, install an alarm system and motion sensor lights. Inform your agent of any changes you make that could potentially change your premium.

Step Four

Improve your credit. Unfortunately, insurance premiums are also based in part on your expected ability to make your payments, and insurance companies do check your credit regularly. If you have a poor credit rating, order a copy of your credit report from a reputable credit reporting agency and analyze the report. Are their mistakes that should be corrected? Are there charged off debts that you could pay off to improve the report? Do you pay your credit card and loan payments on time every month? Making your debt payments on time is a simple and easy way to improve your credit rating; paying off debt is also helpful.

There are many ways you can reduce the cost of your home owner insurance premiums. Simply think of ways to reduce risk, reduce coverage, and reduce debt to improve your premium payment.

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