Insurance Information Institute
The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Here are some things to consider when buying homeowners insurance.
1. Shop Around
2. Raise Your Deductible
3. Don’t confuse what you paid for your house with rebuilding costs
4. Buy your home and auto policies from the same insurer
5. Make your home more disaster resistant
6. Improve your home security
7. Seek out other discounts
8. Maintain a good credit record
9. Stay with the same insurer
10. Review the limits in your policy and the value of your possessions at least once a year
11. Look for private insurance if you are in a government plan
12. When you’re buying a home, consider the cost of homeowners insurance
Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you'll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov. A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area. In California the California Earthquake Authority (www.earthquakeauthority.com) provides this coverage.
If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you're shopping around for a policy. For example, if you run a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.
