Homeowners Insurance

Anyone who owns a home in Florida is either required by their mortgage company to have homeowners' insurance, or the homeowner needs to obtain the insurance to protect the home and the personal property within it.

Here are some tips to save money on your homeowners' insurance.

1. Weigh your options.

It may take a while, but you could end up saving a bundle in the end. Question your friends about it, flip through the Yellow Pages, or contact the state insurance department. Insurance information specific to your state is also available online at www.naic.org/cis. States normally provide information on common rates charged by major insurers. A number of states also allow access to reports of consumer complaints broken down by company.

Additionally, be sure to research consumer guides, insurance agents, insurance companies, and web-based insurance quote services. This will inform you as to which price ranges are available and, more specifically, what companies offer the lowest prices. However, don't let the price fool you. The provider you choose should offer a reasonable price along with the level of quality expected if you need help filing a claim. Talk to an assortment of insurers in order to get an idea what type of service they offer. Find out what can be done to reduce your rates. Use AM Best or Standard and Poor's to determine the companies' financial ratings.

2. Increase your deductible.

In accordance with your insurance policy terms, a deductible is the amount of money it takes to pay against a loss before the insurance company begins to pay a claim. The higher the deductible, the lower your premiums will be. Insurance companies normally suggest a deductible of $500. If you can afford to double it at $1,000, you could save as much as 25 percent. Keep in mind that if you live in an area prone to natural disaster, your insurance policy could include a separate deductible for unique forms of damage. If you live on the East Coast, there may be an additional windstorm deductible. Similarly, if you live in an area susceptible to hail storms, there is possibly a deductible for hail. Likewise, if you live in an area where earthquakes are the norm, your earthquake policy will also have a deductible.

3. Purchase home and automobile policies from the same provider.

Companies that carry homeowners, vehicle, and liability coverage will often reduce your premium by five to 15 percent if you purchase at least two of these policies from them. Before jumping on this opportunity, verify that the combined price is lower than if you were to buy coverage from two different providers.

4. Confirm your home can withstand natural disaster.

Figure out what improvements your home requires in order to hold up to windstorms or other natural disasters. You may be subject to reduced insurance premiums if you decide to add storm shutters or reinforce your roof with stronger materials. Older homes can also be upgraded to better endure earthquakes. After contacting your insurance agent or company representative for suggestions, you may want to consider modernizing your heating, plumbing, and electrical systems to help prevent fire and water damage.

5. Secure your home.

Insurance companies typically offer at least five percent discounts for the installation of a burglar alarm, smoke detectors, or deadbolt logs. Some providers may offer incentives in the vicinity of 15 to 20 percent reductions in policy premium for the addition of a state-of-the-art sprinkler system and a fire and burglar alarm that has a direct link to the local police or fire station. Keep in mind that these systems are very costly, and not all of them are eligible for a discount. Before finalizing a sale, find out what brand your insurer recommends, how much it would set you back, and how much it would lower your premiums.

6. Find out if group coverage is attainable.

If a group insurance program is available through your employer, investigate whether they offer a homeowners' policy. If so, find out if this is a better deal than you can get anywhere else. Also, consider that professional, alumni, and business associations frequently offer packages with an insurance company exclusive to members. Ask your group's director whether a homeowners' insurance discount is available to you and your colleagues through any provider.

7. Stick with one insurer.

If you've remained loyal to an insurance company for many years, you could be entitled to a special rate for being a long-term policyholder. Some companies will lower your premium five percent if you remain a customer for three to five years and ten percent if you stay with them for six or more. Occasionally, it is a good idea to compare these prices with what else is on the market.

8. Don't forget to factor in homeowners' insurance when buying a home.

If you purchase a house near a fire hydrant or in a community that has a professional as opposed to a volunteer fire department, you may find your premiums will be less. They may also be lower if your home's electrical, heating, and plumbing systems are under ten years of age. If you live in the east, a brick house is ideal because it will hold up to strong gusts of wind. If you live in an area vulnerable to earthquakes, you'll want to consider a house with a wooden frame because it is more likely to tolerate violent shaking. Making an astute decision could reduce premiums between five and 15 percent.

Don't forget that flood and earthquake damage does not fall under the umbrella of standard homeowners policy. Purchasing a home in an area prone to flooding will result in an additional annual fee of approximately $400. Valuable information concerning flood insurance can be located on the Federal Emergency Management Agency's website at www.fema.gov. The majority of insurance carriers also offer a separate earthquake policy. The cost of this coverage depends on the odds that an earthquake will strike your area.

If you still have questions regarding insurance for any personal belongings, don't hesitate to bring them up to an agent or rep while you're researching policies. For example, if you own a home-based business, make sure you look into coverage for that company. Most homeowners' policies offer a maximum of $2,500 in equipment coverage and no liability insurance. It is understandable that you want to reduce the cost of homeowners' insurance, but you also want to be certain you have all the essential coverage.