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It'll take a few phone calls, but they could save you a
good sum of money. Ask your friends or relatives, check
the yellow pages or call the state insurance department.
But don't consider price alone. The insurer you select
should offer both a fair price and excellent service.
Deductibles are the amount of money you have to pay toward
a loss before your insurance company starts to pay according
to the terms of your policy. Deductibles on homeowners
policies typically start at $250. By increasing your deductible
to $500, you could save up to 12 percent; $1,000, up to
24 percent; $2,500, up to 30 percent; and $5,000, up to
37 percent, depending, of course, on your insurance company.
Some companies that sell homeowners, auto and liability
coverage will take 5 to 15 percent off your premium if
you buy two or more policies from them.
Consider how much insuring it will cost. Because a new
home's electrical, heating and plumbing systems and overall
structure are likely to be in better shape than those
of an older house, insurers may offer you a discount
of 8 to 15 percent if your house is new. Check its construction,
too. Brick, because of its resistance to wind damage
is better in the East; frame, because of its resistance
to earthquake damage, better in the West. Choosing wisely
could cut your premium by 5 to 15 percent. Avoiding areas
that are prone to floods can save you $400 or so a year
for flood insurance. Homeowners insurance does not cover
flood-related damage. If you do buy a house in a flood-prone
area, you'll have to buy a flood insurance policy, too.
Does your town have full-time or volunteer fire service?
And is your house close to a hydrant or fire station?
The closer your house is to firefighters and their equipment,
the lower your premium will be.
The land under your house isn't at risk from theft, windstorm,
fire and the other perils covered in your homeowners
policy. So don't include its value in deciding how much
homeowners insurance to buy. If you do, you'll pay a
higher premium than you should.
You can usually get discounts of at least 5 percent for
a smoke detector, burglar alarm, or dead-bolt locks.
Some companies offer to cut your premium by as much as
15 or 20 percent if you install a sophisticated sprinkler
system and a fire and burglar alarm that rings at the
police station or other monitoring facility. Before you
buy such a system, find out what kind your insurer recommends
and how much the device would cost and how much you'd
save on premiums.
Smoking accounts for more than 23,000 residential fires
a year. That's why some insurers offer to reduce premiums
if all the residents in a house don't smoke.
Retired people stay at home more and spot fires sooner
than working people. Retired people have more time for
maintaining their homes, too. If you're at least 55 years
old and retired, you may qualify for a discount of up
to 10 percent at some companies.
Alumni and business associations often work out an insurance
package with an insurance company, which includes a discount
for association members. Ask your association's director
if an insurer is offering a discount on homeowners insurance
to you and your fellow graduates or colleagues.
If you've kept your coverage with a company for several
years, you may receive special consideration. Several
insurers will reduce their premiums by 5 percent if you
stay with them for three to five years and by 10 percent
if you remain a policyholder for six years or more.
You want your policy to cover any major purchases or
additions to your home. But you don't want to spend money
for coverage you don't need. If your five-year-old fur
coat is no longer worth the $20,000 you paid for it,
you'll want to reduce your floater and pocket the difference.
If you live in a high-risk area --- say, one that is
especially vulnerable to coastal storms, fires, or crime
--- and have been buying your homeowners insurance through
a government plan, you should check with an insurance
agent or company representative. You may find that there
are steps you can take that would allow you to buy insurance
at a lower price in the private market. |
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