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How to Lower Homeowner Insurance Costs

Also known as hazard insurance, homeowner's insurance is a type of property insurance that covers you against anything that may happen to your private home. The policy generally combines a variety of personal insurance protections - including protections against losses to your home, its contents, or the ability to live in the house - as well as liability insurance for anything that may happen at the home.

Homeowner Insurance policies are generally term contracts made for a fixed period of time. Payments can oftentimes be quite expensive, but there are a variety of ways to lower your insurance rates.

  • Check Your Options. Here's where people most usually fault on their quest for finding affordable homeowner insurance. All too often individuals will go with their first insurance option and it will prove higher than it should be. You'd be surprised with how much you can save just by finding other options. Contact your state insurance department or get information from the National Association of Insurance Commissioners. You may also be able to pick up a great deal of insight by checking consumer guides and talking to insurance agents. They'll be able to give you a range of prices you should expect to see in your hunt for homeowner insurance.
  • Go with a High Deductible. The higher your deductible is, the more money you can save on your premiums. That's because a higher deductible means that you'll be paying more towards any loss before your insurance company starts to pay the claim. Most insurance companies suggest a deductible of at least $500, but you should be willing to pay something closer to $1,000. If you can, it's possible that you could save up to 25% on your premium rates.
  • Remember the difference between cost of house and rebuilding costs. Only pay for the product, not the land, as the land isn't at risk from theft or most natural disasters. Including the value of your land in your policy will only increase the amount you'll have to pay.
  • Buy your policies from the same insurer. It's a pretty simple line of thinking: if you have a solid driving record and use the same insurer, they'll recognize that you're someone who can be trusted. In turn, they'll keep your costs low.
  • Disaster-proof your House. Install storm shutters, reinforce your roof, or retrofit your foundation. All of these actions can lower your premium costs. Additionally, you can lower your rates by modernizing your heating and electrical systems or quitting smoking.
  • Keep your credit scores up. More and more, insurers are looking at your credit history to decide what kind of homeowner insurance policies they should offer.
  • Stay with the same company. This is more-so the case if you're happy with your present situation, but if you are you can only benefit from working with the same company that's been able to trust you for a period of time. Certain companies have been known to reduce their premiums by 5% if you work with them for 3-5 years and 10% if you stay for 6+ years.
  • Look for private insurance. If you were intending on buying your insurance through a government plan you may want to consider the fact that you can save a great deal by working with a private provider. They deal with fewer restrictions and, as such, can make more personalized offers to their clients.




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