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There are lots of little things that can affect
your homeowners insurance premiums (besides the coverage amount, of course).
These include being a non-smokers discount and
having a fire alarm. Some advice on some
of the biggest discounts is listed below.
Raise the Deductible
Raising the deductible is one of the biggest ways to
reduce the premium. You should raise it to a level
where you would feel safe covering any losses.
If you have an emergency fund that could easily
cover $2500, go ahead and raise your deductible to $2500.
This advice also leads us to another point...
Think Twice Before Filing a Claim
It can be against your best interests to file small claims.
Many companies will raise your premiums based on the
number of claims you make, and some will drop your
homeowners insurance policy altogether. It could become difficult to
find any companies that will insure your home.
And since you are not making small claims, you might
as well raise the deductible on your policy.
Get More Insurance
One of the other biggest discounts comes from
buying other types of insurance from the same company.
Just ask your agent if they have any discounts
for getting multiple policies. If it is a good company,
and the price is reasonable, you might as well get an
auto insurance policy with them too.
Keep Your Credit Score Clean
Credit scores are not just for mortgages. Insurance
companies are using them to assess how "risky" of
a homeowner you may be. Yes, it sounds unfair; after all,
what does your credit score have to do with the chances
of your house getting hit by lightning.
The legality of this practice (called "credit scoring")
is being debated, but many insurers are still doing it.
There have been reports of premiums doubling or tripling
due to the use of credit scores in setting homeowners insurance
premiums. So keep your bills paid on time.
Getting Your Free Credit Report
By law, you are entitled to one free copy of your
credit report each year. To retrieve it, just go to the
FTC credit site. Most of the
other "free credit report" sites offer a free trial
for a subscription service with a hefty annual price
(paid right after the 30-day trial period). Their services
can be worth the price if you like to keep a close eye on your
credit; just be aware that they will start charging you after
a while.
If you suffer from bad credit, the most informative (and
free) place to learn how to improve it is the
CreditNet Forums.
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